The cold tension brought on by the sight of uppercuts and quick punches in the raw legal combat of the libel trial Ariel Sharon v. Time Inc. is broken only by odd moments of levity.

"This case is not a clean case," Judge Abraham D. Sofaer said from the bench last week. "There's going to be a lot of explosive and damaging material coming out on both sides."

Overflowing crowds have to clear two metal detectors in the federal courthouse in lower Manhattan to hear stories of massacre, war and intrigue in this Middle Eastern drama.

Sharon, the former Israeli minister of defense, is the principal figure in a cast that features lawyers from two of New York's powerhouse firms. Thomas D. Barr of Cravath, Swaine and Moore represents the multibillion-dollar publishing empire, and Milton S. Gould of Shea and Gould represents Sharon.

"Wednesday is my regular theater day," spectator Rebecca Rolland told a New York Times local columnist the day after the Nov. 13 opening of the trial, "and this is the best theater in the city right now."

During recesses Sharon partisans and adversaries, journalists and schoolboys wearing yarmulkes huddle in knots to argue over which side won the last round.

But there are audiences beyond the courtroom -- perhaps none more important to Sharon than his countrymen back home where he has been attempting a political comeback.

It is telling that when Sharon, who testifies in fluent English, spoke briefly to reporters and camera crews outside the courthouse one day, his words were in Hebrew.

In opening arguments, Sharon's lawyer, Gould, said his client would show that Time was sloppy and reckless in publishing an article prominently mentioning Sharon. Gould said Time had taken a "lie" from one of its correspondents in Israel and turned it into a "worse lie" during editing and rewriting in New York.

Although Judge Sofaer ruled before the trial that there was no basis for presenting evidence on Sharon's charge that Time has exhibited a longstanding anti-Israeli bias and anti-Semitism, Sharon and his lawyer have been admonished by the judge for attempting to bring it into the trial by the back door.

Time has charged that Sharon cannot prove the falsity of the magazine article and that he cannot claim that he was defamed by it because his "reputation has long been that of a bloodthirsty, insubordinate militarist."

A few days before he left Israel to come here for the trial, Sharon said on Radio Israel, " . . . The Jewish people always knew to stand up to acts of this kind, and this time as well this act will not hinder me to stand up against one of the . . . centers of anti-Semitism existing these days in the world, Time magazine, in a battle that is, according to my opinion, not a personal battle but a battle of the Jewish people and the state of Israel."

Perhaps Israel's most controversial public figure, Sharon, 56, has been hailed by his troops as "Arik [his nickname], king of the Jews," and is revered by many Israelis who admire his blunt style and daring successes on the battlefield. He is vilified by others as "Sharon, murderer."

He was the architect of Israel's controversial settlements policy on the occupied West Bank and of its 1982 invasion of Lebanon, a war that drags on.

The invasion split Israel into bitter divisions that were sharpest in September 1982, the period of focus in the trial, when Israel's Lebanese Christian militia allies massacred hundreds of Palestinians in two west Beirut refugee camps surrounded by Israeli soldiers.

The killings occurred days after a multinational force of U.S. Marines and French and Italian soldiers that had aided in the evacuation of Palestinian leader Yasser Arafat and thousands of his guerrillas had left Lebanon.

In Israel, a three-member commission, informally referred to as the Kahan Commission because its chairman was Yitzhak Kahan, former chief justice of the Israeli Supreme Court, was established in response to the outcry. It concluded that Sharon bore "indirect responsibility" for the atrocities.

The legal case here has a much narrower focus than the Kahan Commission's inquiry, but Sharon has testified that he still disagrees with the commission's verdict, which cost him his post as defense minister. He continues to argue that he bears no blame for the massacres.

Sharon has had other falls from grace that were followed by triumphal comebacks.

He has announced that he will challenge Yitzhak Shamir, now foreign minister, for leadership of the Likud bloc, which is sharing power with the opposing Labor Alignment in the fragile national-unity government that took office in September.

Under the terms of the accord, the post of prime minister, now held by Labor's Shimon Peres, will go to the Likud bloc after the government's first 25 months, if it survives that long. If successful here and later in his bid for leadership of the Likud, Sharon would be well-positioned to become prime minister.

But the more immediate question is how the courtroom drama is being seen by the 10 New Yorkers in the jury box.

The judge is Jewish, and so are some attorneys on both legal teams, but lawyers confirm that there are no identifiable Jews on the panel, which was drawn from a citizenry in metropolitan New York with about 2 million Jews -- about two-thirds the number living in Israel.

According to Gould, Sharon's lawyer, "Some of the Jewish people called didn't want to serve. One of the men called said he didn't feel that he could be unbiased."

At issue in this case is a single paragraph in the cover article of Time's Feb. 21, 1983, editions, which is entitled "The Verdict is Guilty: An Israeli Commission Apportions Blame for the Beirut Massacre."

The paragraph alleges that Time had learned that a secret appendix of the Kahan Commission report contained details about Sharon's visit to the family of slain Lebanese Christian Phalangist leader Bashir Gemayel the day before Sharon allowed the Phalangists into the refugee camps during which Sharon " . . . reportedly discussed with the Gemayels the need for the Phalangists to take revenge for the assassination of Bashir . . . . "

Sharon acknowledges paying a condolence call on the Gemayels. But he insists that no such conversation took place or is reported in the appendix. He has accused Time of "blood libel" and is seeking $50 million in damages.

The judge has ruled that a 1970 international agreement gives Sharon the right to sue in American courts. Sharon has also brought the same libel suit in Israel but it is backed up in the overloaded courts there.

Time argues that Sharon's interpretation of the controversial paragraph distorts its meaning, but Time's efforts to subpoena the secret appendix have been blocked by the Israeli government on the grounds of national security.

The Israeli government has also forbidden generals and other high-ranking officers involved in Israel's invasion of Lebanon to testify. Time got permission from the Israeli government for some lower-ranking officers to testify.

The government of Israel is not a party to the lawsuit, but the previous Shamir-led cabinet authorized Sharon to go on a lecture tour of the United States to raise funds to help defray his legal costs.

The current national-unity government is paying travel and living expenses for Sharon and his wife under the theory that while in New York, Sharon, as minister of industry and commerce, is supposedly talking to investors about opportunities in Israel.

The trial is getting front-page coverage in the Israeli press, but Washington Post correspondent Edward Walsh in Jerusalem reports it is of far less interest there than the economy and the talks to extricate Israeli soldiers from Lebanon.

Up to now, Sharon has been the only witness in the trial that is expected to go on for weeks. There have been skirmishes over his refusal to answer certain questions on the grounds of Israeli national security or because he fears that identification of Lebanese who worked with Israel would endanger their lives.

After Sharon's lawyer said he could not sustain Sharon's objections to responding to one line of questioning, the judge told Sharon he had to answer.

Sharon has resisted other efforts by Time to limit his often wide-ranging responses in which he mentions Oriental architecture and his theories of Arab psychology.

At one such point last week, Sharon, chafing at the restraints Time is trying to impose on his responses under cross-examination, complained, "If in Lebanon, one could say yes or no, then everything would be simpler."