Israeli Prime Minister Menachem Begin today invoked a defense regulation dating back to the time of the British mandate over Palestine to ban a congress of Israeli Arabs scheduled to be held Saturday in Nazareth.

The decision to invoke the regulation has already aroused serious criticism not only among the organizers of the congress, who are mostly members and sympathizers of the Israeli Communist Party, but also among Israeli Jews themselves.

Critics of the move argued that the decision not only served to undermine Irsaeli democracy but was probably also politically unnecessary since Arabs active in Israeli politics were already campaigning to convince many of those invited to stay away.

Organizers of the congress had prepared a platform, which they called the Sixth of June Covenant, and expected it to be adopted by several hundred delegates from the more than 600,000 Arabs living in Israel. The draft "covenant" calls for the establishment of a Palestinian state and the granting of the right of self-determination to all Palestinians.

Emil Tomeh, a veteran Israeli Arab communist who was the moving spirit behind the planned Nazareth meeting, argued in press interviews that despite the bold wording of the draft resolutions they in no way contradicted the standing of the participants as loyal Israeli citizens.

He said the Israeli Arabs had already won their civil rights, including that of electing their representatives to the Knesset (Israel's Parliament) and therefor also enjoyed the right to self-determination. They now had to see to it that the rights of Arab inhabitants in the occupied territories were also assured, he said.

Communist organizers of the "congress of the Arab masses" did not hide the fact that they hoped the meeting would elect a "representative body of Israeli Arabs to handle their contacts with outside world. It should be recalled that the Israeli Communst Party, which is now called the Democratic Front, has made considerable inroads into Arab communities, particularly in Galilee, and now control 18 local councils, including the municipality of the largest Arab community, Nazareth.

The projected congress and its platform antagonized most Israelis including the opposition Labor Party, which called on its 130 newly elected Arab members not to paricipate. However, many of those who were unhappy over the congress argued tonight that the prime minister's decision to prohibit it might prove to be counterproductive.

They argued that it was not only politically unwise but probably also unnecessary. They noted that experts on Arab affairs had serious doubts about the congress' ability to attract representatives from many Arab groups, including some of the ultra-nationalists among the Arabs who had objected to it.