Prime Minister Menachem Begin today sharply rejected the notion that the Palestine Liberation Organization is embarked on a course of moderation and pledged that Israel will not negotiate with the PLO and give rise to "another act of genocide in our time."

Referring to PLO leader Yasser Arafat's remarks Sunday indicating that the organization's charter does not call for elimination of Israel, Begin quoted from what he said were articles of the PLO covenant that explicitly rule out a Jewish state in the territory that before 1948 was Palestine.

While Begin's remarks echoed longstanding Israeli policy toward the PLO, their vehemence in rejecting Arafat's contention underscored growing concern in the government here that the PLO has been gaining respectability in Western Europe and the United States.

Such signals of seeming moderation from Arafat and other PLO spokesmen have become a source of constant worry to Israeli policymakers in recent months because of the impact they are believed to have on public opinion in the United States and Europe, where sympathy toward the Palestinian cause is increasing.

Coupling with a slowdown in terrorist attacks by the PLO inside Israel, the Israelis view the change in perception of the PLO abroad as inevitably leading to increased U.S. pressure on Israel to open a dialogue with Arafat, something that increasing numbers of Israeli leftists and peace activists are urging.

Israeli officials were distressed at the meeting in New York last month between Andrew Young and a PLO diplomat that led to Young's resignation as the U.S. ambassador to the United Nations. Begin in recent days has distanced himself from Foreign Minister Moshe Dayan's unofficial talks with PLO sympathizers in Israeli-occupied territories, saying his government would never officially talk with "emissaries of death."

The official view of the government is that the PLO's appearance of moderation is contrived and designed to undermine the Egyptian-Israeli peace treaty.

An aide to Begin, touching on a paradox that all Israelis recognize but few like to talk about, said of the PLO today that "when the start up the terrorist attacks again they'll lose some of their newfound respectability. Unfortunately for us, that's what it's going to take."

Israeli officials contend that a key way in which the PLO is attempting to gain respectability is by clouding the issue of whether the elimination of Israel is a basic tenet of its movement.

In an interview on ABC's Issues and Answers yesterday, Arafat said he did not remember any clause in the PLO charter that calls for the elimination of Israel.

When told by interviewer Barbara Walters that she had read such a clause, Arafat retorted, "Did you read our charter? Is it an accurate translation? Did you receive it from the Israeli embassy? . . . I did not remember that (clause)."

Begin said today, however, that articles of the PLO charter refer to Palestine as "an indivisible part of the Arab homeland," and declare that the PLO will "cleanse Palestine from Zionist rule." Moreover, Begin said, the covenant specifies that only Jews who lived in Palestine "until the beginning of the Zionist invasion" will be permitted to remain, and they will be considered Palestinians.

Since the beginning of the "Zionist invasion" refers to the Balfour declaration of 1917 in which Britain pledge support for a Jewish homeland, Begin said in a speech to an international medical symposium here, the PLO charter would mean the expulsion of more than 3 million Jews from Israel.

Officials in the Likud government, from Begin on down, dismiss out of hand any likelihood that Israel will ever talk with the PLO.

Zvi Mazael, the Foreign Ministry's top analyst of Palestinian groups, argued that the PLO is inexorably married to its charter and that if the charter were revoked, the PLO would cease to exist as a liberation movement.

"By its very nature, the PLO cannot accept Israel's right to exist because it is the antithesis of the state of Isreal. It came into existence by the charter and if the charter is revoked the PLO will erupt into turmoil and collapse," contended Mazael, who is deputy director of the Foreign Ministry's treaty implementation section.

"The best position for Israel now is to say 'no,' total no, to the PLO. There is something in its nature not to be changed, and it cannot be changed. So why become involved in it?," Mazael added.

Begin recently underscored that policy dramatically when a top adviser to Romanian President Nicolae Ceausescu's meeting with Arafat and Syrian President Hafez Assad. Ceausescu played a key role in arranging Egyptian President Anwar Sadat's historic 1977 visit to Jerusalem.

Begin received the Ceausescu aide in his office, but steadfastly refused to listen to a report of the Romanian president's talks with Arafat. The envoy left the next day, that part of his mission undone.