Khallid Abdul Muhammad towered above Harlem traffic, standing in a car's sunroof, waving his fist defiantly in the air as he headed a caravan to celebrate his latest court victory.

Muhammad can have his rally. He can make his infamous utterances. He can spew his barbs at white people ("crackers"), at Jews ("blood suckers") and at local black leaders ("Uncle Toms like you we ought to kill" because they've concluded he is a dangerous man and have called for a boycott of his so-called Million Youth March this Saturday).

But Muhammad's right to convene his event has been upheld by the U.S. Court of Appeals for the 2nd Circuit on the grounds that even "bigoted, hateful, violent and frightening" speech is protected by the First Amendment.

The event organized by Muhammad, a freelance black activist and agitator since he was ostracized even from Louis Farrakhan's similarly incendiary Nation of Islam in 1994, appears set to go off with none of the community support or tolerance of last year's, when churches stayed open so marchers could rest and civic groups chipped in with water stations for the weary. Even still, he drew as few as 6,000 people to his march, according to police. Muhammad's group says the number was far higher.

The court ruling on Wednesday clears the way for what city officials, community leaders and the news media here have treated like an O.K. Corral standoff: Muhammad and his disputed number of supporters against Mayor Rudolph W. Giuliani and his police force, which last year proved quite up to the task of shutting down the march and, in the process, sparking a brief melee in which 28 people, including 16 police officers, were hurt.

"These judges have their heads in the sand," Giuliani said of Wednesday's ruling. "I think their decision is irresponsible." Giuliani, who calls Muhammad a "hatemonger," described the rally as a "hate march."

This year, as they did last year, city officials tried to use Muhammad's record of inflammatory speech as a reason to deny him a city permit. And this year, just like last year, Muhammad's organization sought the protection of the courts and won rulings in its favor.

This time, the court has firmly outlined the rules for both sides. Muhammad's group can only rally, not march, using six city blocks in Harlem over the course of four hours, ending as close to 4 p.m. as possible. City police, for their part, cannot send thousands of riot officers to the scene, as they did last year, to break up the rally if it goes beyond 4 p.m.

"What [Giuliani] did last September 5 was criminal and he should have been indicted for that, because he gave an order for police to move on a rally that had already ended," said Roger Wareham, attorney for the Million Youth March organization.

Last year, about 3,000 officers on foot and on horseback, equipped with riot gear and backed by police helicopters hovering as low as the rooftops, converged on the rally shortly after 4 p.m., when the city-issued permit said it had to end.

From onstage, Muhammad urged ralliers to take officers' guns, nightsticks and barricades and use them as weapons. That he resorted to such violent rhetoric in the heat of a dangerous situation caused many black leaders to distance themselves from him.

The coolness continued this year as Muhammad called on youth gangs to attend his march with their weapons. The confrontational nature of the event worsened when City Councilman Bill Perkins, an opponent of the march, was confronted by Muhammad and his supporters 11 days ago. Perkins said they taunted him and pushed him around, yelling, "Uncle Toms like you we ought to kill."

Perkins described Muhammad as "totally marginalized" and said he did not expect this year's crowd to match last year's number.

But Perkins and other Harlem leaders also are concerned about potentially provocative police tactics. Today they met with Police Commissioner Howard Safir to get assurances that the heavy-handed tactics of last year won't be repeated, such as the use of barricades like cattle pens, keeping sections of the crowd separated.

The meeting's participants got assurances "that it wouldn't be like that" this time, Perkins said.

"I think there will be no helicopters," said Michael Hess, the city's corporation council. The city also has agreed to be more flexible on the ending time of the rally; to keep subway service to the area operating; to refrain from excessive crowd control with barricades; and to deploy half the number of police compared with last year. But Wareham remains skeptical.

"I have no confidence that the police are going to act any differently," he said.

"I expect the same kind of provocative acts they used last year, because Giuliani wants to create a self-fulfilling prophecy . . . that it's going to be violence and hate."

CAPTION: Khallid Abdul Muhammad hugs Delores Blakley in celebration of court decision allowing his Million Youth March on grounds that "even bigoted, hateful, violent" speech is protected by the Constitution.