After months of debate over a gag law passed in 1976 when the parliament was suspended, Kuwaiti publishers and editors have succeeded in convincing the new National Assembly to vote down the legislation. Now they are resisting a government attempt to impose a slightly milder version.

"The government [proposal] is not accepted either by the publishers or parliament, nor even some ministers," said Ahmed Jarallah, the feisty owner and editor of the Arabic-language Al Seyassah newspaper. "No one will accept it. It would mean the Ministry of Information will control the press. Nobody in Kuwait is for this."

The idea that the ministry should not control the press says a lot about the relative freedom already enjoyed by newspapers here. In many developing nations, the government "guides" or directly controls the print media. With its independence, the press here is more akin to the Westernized Beirut media.

The focus of the battle between publishers and the government is over Article 35 of the law regulating the publication of newspapers. The new draft article spells out offenses for which a newspaper can be silenced for up to two years.

Such transgressions would include "reports tending to harm the country's economy or political system," damaging criticism of Kuwait's ruler, government or National Assembly, and any articles serving to "stir up sectional divisions within the community, mutiny or the obstruction of public works."

But the publishers object most to the article's final section, which would forbid stories detrimental to "harmonious" relations with another Arab or Islamic state or attacking a head of state whose government maintains diplomatic relations with Kuwait. When it comes to commenting on these matters, Kuwaiti editors and commentators often have a sharp pen and do not hesitate to wield it.

The government is thus attempting to protect Kuwait's larger and more powerful neighbors along the Persian Gulf, none of which is used to the idea that press commentary and official opinion can be separate. Another factor is that the Kuwaiti press, though owned by Kuwaitis, is a haven for Palestinians and other Arab expatriates, who often have their own axes to grind.

"Kuwait is a very small country and in a unique position," remarked Jassem Mutawa, editor of the fast-growing Al Watan newspaper. "It has no protection but its balanced political policy in the gulf and the international situation. The neighbors are watching, and they don't like too much freedom."

Kuwait has five Arabic and two English newspapers for a population of about 1.5 million, fewer people than in the metropolitan area of Washington, D.C.

According to a study of the Kuwaiti media prepared by the U.S. International Communication Agency, circulations of the Kuwaiti dailies range from 35,000 of the English-language Arab Times to 65,000 of the Arabic Al Qabas. All sell a substantial number of copies in other gulf states and in Europe, where there are large Arab communities.

Most of the papers are family-owned and all are reported to be making money, mainly because of high advertising rates. A full page ad in Al Watan costs $4,950.

"There are no big profits and no big losses," said Jarallah. Al Seyassah is his main business interest--not the case with most of the other family-owned newspapers. "We have the quantity now, but in the future we will have better quality and some will merge," he predicted.

The battle between the press and government got under way shortly after Kuwait elected a new assembly in February 1981. It was generally regarded as far more moderate than the one dissolved by the ruling Sabah family in 1976.

Its first divisive issue was the press law put through by the government while there was no parliament.

The publishers succeeded in early November in persuading the new parliament to vote down 29-14 the disputed Article 35, with 10 Cabinet members--who are also allowed to vote--abstaining. But the government has kept the issue alive by proposing new language with most of the old intent.

Initially, the government's rationale for imposing censorship was that Kuwait risked facing the divisions and violence of Beirut, where the press has become a mirror of Arab world feuds with each newspaper used by a faction to promote its cause.

A spate of bomb attacks during 1980 and early last year, in one case against a newspaper, seemed to lend credence to this official concern.

The government grew more nervous when war broke out between Iran and Iraq in September 1980, putting Kuwait in a squeeze between two powerful, volatile neighbors.

The publishers tried to meet mounting government sensitivity by drawing up their own "press charter of honor" with self-imposed guidelines to protect the "noble goals" of Kuwait's national interests. They also pledged to maintain the independence of the press from foreign powers.

But the publishers insisted on the right to protect their sources of information, even while agreeing to avoid "libelous" reporting, a clear reference to the unwritten practice now of not attacking Arab rulers by name when assailing their policies.

The charter apparently has not reassured the government, which is still pressing for its revised version of Article 35, although reportedly with less insistence recently.

Editors Mutawa and Jarallah seem convinced that the government, after losing the last round of the battle in parliament by a large margin, will not push all that hard now for its latest proposal. It may have another reason as well, they feel.

"The press is part of our good image," remarked Jarallah, "and they the government are getting the advantage out of this. It is one of the things they are proud of."