Israel defied international criticism yesterday and sent its warplanes to hammer strongholds in southern Lebanon for the second consecutive day as Prime Minister Menachem Begin publicly vowed to continue the attacks on Palestinian guerrillas "wherever they are and whenever we can."

Witnesses in Lebanon reported many dead among both guerrillas and noncombatants, and hospital sources in the south said at least 10 people were killed or wounded.

The air raids came after Palestinian and Arab guerrilla crews fired a barrage of rockets at Israeli settlements in the northern Galilee panhandle, the Israeli military reported. It said there were no injuries in that attack.

The Palestinian news agency WAFA said Israeli fighter jets, in a "ferocious" attack, bombed and strafed the once-prosperous market town of Nabatiya 25 miles east of Beirut and also struck the nearby 11th-century Beaufort Castle. At the same time, rightwing Christian militiamen unleashed a 30-minute artillery barrage against the same targets.

Witnesses here said waves of Israeli planes repeatedly attacked Nabatiya.

"The Israeli planes came in formations of eight jet fighters at a time over a period of 2 1/2 hours without letup," said one local reporter who witnessed the raid. He said the jets swooped down over the area every 10 or 15 minutes, firing rockets and machine guns.

He said the planes also bombarded a former school for orphans in Chukein, a village about a mile south of here. The school had been turned into a Palestinian guerrilla base, according to local residents.

"There were scores of casualties inside the school," said the reporter. "I saw the burned body of Abu Arab, a military commander of the [Iraqibacked] Arab Liberation Front, inside his charred car near the schoolyard."

Beaufort Castle, built on a hilltop by French Crusaders and used now as an artillery base for attacks on northern Israeli settlements, was the scene of some of the heaviest fighting in a large Israeli commando raid late monday and early Tuesday. The Israelis claimed they killed up to 60 guerillas. They said three Israeli paratroopers died in the operation.

All three were buried yesterday in Tel Aviv.

Prime Minister Begin, who alo serves as defense minister, told mourners at the funeral of Capt. Yosef Oved that yesterday's renewed air strike was not a retaliatory raid. "There is no more retaliation in Israel," Begin said. "We will not wait until the barbaric enemy comes into out cities . . . and slaughters our children."

An Israeli military spokesman said all the planes returned safely after bombing "forward and organizational bases used for strikes" against Israel.

Residents in Nabatiya reported families were fleeing yesterday to the port city of Sidon. Many lugged their possessions on trucks and motorcycles as they deserted the town, one a flourishing center with 35,000 inhabitants. Today, fewer than 5,000 persons still live there.

Earlier yesterday, WAFA claimed Israeli border gunners teamed up with the Lebanese Christian militiamen in an artillery attack on a string of hamlets and town, including the port city of Tyre, 50 miles south of Beirut and 12 miles north of the Israeli border. A military spokesman in Tel Aviv denied Israeli soldiers were involved in the shelling.

The militiamen are loyal to renegade Lebanese Army Maj. Saad Hadad, entrenched in a 59-mile-long Border enclave just north of Israel. Haddad has vowed to evict all Palestinian guerrillas from southern Lebanon.

Tuesday's major air and ground raid was the largest in Lebanon since March 1978, when 25,000 Israeli troops occupied a large part of southern Lebanon for three months.

The operation, staged by approximately 500 Israeli troops, was condemned by Lebanon, France, Egypt and the U.S. Embassy in Beirut.