Sen. Edward M. Kennedy (D-Mass.) upped the ante somewhat tonight in his verbal skirmishing with President Carter, delivering a tough political sermon against Carter's recent talk about national "malaise" and the need to recognize new fiscal and governmental limits.

Sounding more than ever like a man determined to challenge Carter for the Democratic presidental nomination, Kennedy focused on a subject that has been a favorite of Carter's Republican critics: leadership.

"What we need today," Kennedy shouted to a crowd of 1,400 at a fund raising event here for Democratic mayoral candidate William Green, "is the same quality of leadership we have always had at our greatest moments.

"We want action, not excuses. We want leadership that inspires the people, not leadership that . . . blames the people for malaise."

Kennedy never mentioned Carter, but he didn't have to. The remark about "malaise" was a reference -- obvious to everyone in this Democratic audience -- to Carter's nationally televised speech on the subject last summer.

Kennedy's tough rejection of the need to face new limits was also targeted at Carter.

Last weekend, the president quoting the speeches of Sen. Kennedy's late brother, John F. Kennedy, suggested that Americans should rethink the belief that the country's economic and military capabilities are unlimited.

Tonight, Sen. Kennedy argued the opposite.

"There are some who say this nation has now reached the limits of its strength," he said. "I reject those views completely. They are counsels of defeat and despair, excuses for leadership that has failed to do its job."

If Kennedy chose a topic frequently adopted by Republican presidential hopefuls like John B. Connally and Ronald Reagan, the content of his speech largely sounded like classic Connallyspeak or even Reaganspeak.

"I refuse to believe that America is second best," Kennedy said. "I refuse to believe we are a declining power."