The Israeli government has revived the controversial issue of press censorship and political rights of Palestinians by closing down the West Bank newspaper Al Fajr, which publishes both Arabic- and English-language versions. The government said the newspaper had published "encouragement" of terrorism and articles deemed to be a danger to security in the occupied territories.

An order for a one-month suspension of Al Fajr, one of three Palestinian weeklies published in East Jerusalem and read widely in the West Bank, was given last week by Interior Minister Yosef Burg with the approval of Prime Minister Menachem Begin. Begin had condemned Al Fajr in a speech to Israel's parliament Wednesday, saying the newspaper expressed jubilation over the murders of a moderate Palestinian local leader in Ramallah and his son on Nov. 17.

Palestinian journalists said Begin and Burg may have been more concerned about Al Fajr's recent editorial attacks on the Israeli-backed Village League -- which West Bank nationalists have branded "collaborationist" -- and its architect, Menachem Milson, who recently was appointed civilian administrator of the West Bank.

They said the government was also indignant over two unsigned columns in the Arabic edition that openly celebrated the assassination of Egyptian president Anwar Sadat.

Al Fajr editor Hanna Siniora denied he had published inflammatory articles and said the closing was a "political act" stemming from Al Fajr's opposition to the Village League, an organization of Palestinian moderates that the military government is attempting to establish in the West Bank as an alternative to the Palestine Liberation Organization.

The newspaper has applied to the Supreme Court for a temporary restraining order.

The suspension was based on a 1933 press ordinance that is part of an emergency security act carried over from the British Mandate of Palestine. Earlier this month, Al Fajr was suspended for a week by the Israeli military censor, touching off criticism of Israeli censorship policies by not only by Arabs but by Israeli civil rights activists.