Like a swashbuckling military commander, Yigal Shiloh led a contingent of journalists and television camera crews down a dusty path today to an ancient site that is also a modern battlefield of sorts.

Dressed in a broad straw hat, pinkish-red shirt and blue jeans, Shiloh, who is not a military commander but professor of archeology at Hebrew University here, was conducting what has become an annual August ritual for him--the end-of-the-season inspection tour of archeological excavations.

The site is located a few hundred yards south of the walls of Jerusalem's Old City. Digging there now for six summers, archeologists engaged in the current excavations have uncovered artifacts and other material dating from around 3,000 B.C., from the very beginning of Jerusalem as a city, according to Shiloh.

That is all very interesting, especially to archeologists, but it is not the reason for the controversy that swirls around the City of David digs as they are known, or the attention the excavations annually receive. Rather, the attention is always focused on the ongoing battle between the archeologists and some members of Jerusalem's rigidly orthodox Jewish community over one site at the excavations known as area G.

The trouble began two years ago, an outgrowth of the inherent religious and secular tension in modern Israel, established in 1948 on part of the land King David conquered for the Israelites 3,000 years ago. Maintaining that area G is the site of a medieval Jewish cemetery and by religious law should not be disturbed, the rigidly orthodox have staged sometimes violent demonstrations in an attempt to disrupt the digging.

Last year, with the country's attention focused on the war in Lebanon, the summer excavations passed in relative calm. But this year, with the war more or less over, Jerusalem has returned to normal. Tourists by the thousands have returned, hopelessly clogging the ancient city's streets, and the religious protesters have resumed with a fury their war with the City of David archeologists in what threatens to become an annual prelude to Shiloh's end-of-the-season tour.

The protests this year have included violent clashes between police and the religious "zealots" as the protesters are referred to by the Israeli press. There were also scores of injuries and arrests, and a late-night parliamentary maneuver aimed at shifting responsibility for the sites to a ministry more sympathetic to the orthodox believers.

Having promised to delay for a day consideration of legislation that would transfer control over archeological sites in Israel from the Ministry of Education to the Ministry of Religious Affairs, the orthodox Agudat Israel party brought the measure up just after midnight and won preliminary approval of it. Leaders of the party blandly announced that it was, in fact, "the next day."

The measure is still a long way from becoming law, but if it is ever enacted by Israel's parliament, the Knesset, professional archeologists here maintain it will spell the end of serious excavations in such sites as the City of David.

Meanwhile, Shiloh vowed today, as he has in the past, that the work at area G will continue despite the outcries--even if it must take place, as it has, under the watchful eyes of armed Israeli soldiers. Shiloh, the director of the City of David project, and others in the field say that there is no evidence to suggest that area G once was a Jewish cemetery.

"I'm very sorry, but we will not stop our work," he said. "If there is a thief in town, you don't close the banks, you catch the thief."

Area G, the focal point of the controversy and the first stop on Shiloh's tour, is a steep, rocky slope on the side of a hill within sight of the wall of the Old City. Its central feature, excavated over the years by the archeologists and hundreds of volunteers who annually flock to Jerusalem to help with the painstaking work, is a towering slope of rocks and boulders more than 20 feet high.

This, according to Shiloh, is the substructure of the Citadel of Canaanite Jerusalem, dating from about the 14th century B.C. The archeologists believe the Citadel of David, built after the period when Jerusalem was the capital of the Israelites, was constructed on top of the Canaanite citadel.

Shiloh said this year's most important finds from among the 12 separate excavation areas at the site included buildings and floors containing pottery from the era of David and Solomon and evidence of the earliest urban phase of Jerusalem, at the end of the early Bronze Age in 3,000 B.C.

Smaller finds, he said, included carbonized wooden fragments from the Israelite period. The material has been identified as boxwood, whose source in northern Syria or southern Turkey suggests the extent of trade at the time, he said.

There is also evidence of the modern City of David controversy left behind by some of this summer's workers at the site headquarters--a hand-painted poster depicts area G, and above the excavation a group of angry members of the rigidly orthodox community poised to throw rocks at the workers laboring in the dust.

Besides rock throwing, the protesters have resorted to imposing a formal "curse" on the archeologists. With this apparently in mind, the unknown poster painter had written beneath the scene: "Curse of the week--'And may their hands drop off.' "