A State Department order closing the Palestine Liberation Organization's information office here was upheld yesterday by a federal judge, who rejected claims that shutting the office was unconstitutional.

U.S. District Court Judge Charles R. Richey said Secretary of State George P. Shultz "acted lawfully in determining that the PIO {Palestine Information Office} is a 'foreign mission' of the PLO" that could be closed under the Foreign Missions Act.

The State Department, citing involvement in terrorism by "individuals and organizations associated with the PLO," ordered the office closed by Dec. 1. The government postponed the deadline until midnight tonight to give Richey time to decide the legal challenge mounted by the American Civil Liberties Union.

The ACLU contended that closing the office would violate the First Amendment guarantee of the rights of free speech and assembly, and said it will appeal Richey's decision.

Richey said the ACLU's "attempt to characterize the action by the secretary of state here as the regulation of political advocacy or speech within the United States is without merit."

"The secretary's order merely prohibits the PIO from operating as a 'foreign mission' of the PLO," Richey said in a 16-page opinion. Nothing prohibited the office's staff from continuing to engage in political activity to further the cause of the Palestinian people, he said.

Richey found that the closing was justified because it furthered a "compelling governmental interest" that only incidentally restricted First Amendment rights.

"In situations where a strong and compelling governmental interest allegedly conflicts with an asserted constitutional right, the Supreme Court has applied a balancing test," Richey said. The high court held in 1968 that "a sufficiently important governmental interest can justify regulating non-speech conduct," Richey said.

The judge found that Shultz's Sept. 15 order "was crafted carefully to ensure that it was content neutral and unrelated to the suppression of free expression."

"On its face, the secretary's order was not based on disagreement with the content of the message advocated by the PIO, but rather as an expression" of U.S. concern about the PLO's link to terrorism, the judge said.

The ACLU contended that the office had a legal right to function under the Foreign Agents Registration Act because it was a lobbying office staffed by U.S. citizens who were not controlled by the PLO.

The State Department had made the same finding last spring in a letter to the president of an Arab-American group. But in court papers filed in the case, the State Department cited classified information that the office was operating as a diplomatic mission of the PLO. The classified material was not disclosed to the court.

Morton H. Halperin, director of the ACLU's Washington office, said, "If this decision is allowed to stand, the secretary of state would have the unfettered and unreviewable authority to close down the office of any group of Americans who are associated with a foreign political movement."

Hope Nakamura, an ACLU attorney, said the group will appeal Richey's order.