September 25, 1982

Prime Minister Menachem Begin asked the Chief Justice of Israel's Supreme Court today to head an inquiry into Israel's involvement in the civilian massacre of Palestinians in Beirut. But the move by Mr. Begin, in an effort to quell growing criticism within his own party and to curb widespread outrage in much of the diverse Israeli political spectrum, fell short of the full impartial judicial commission proposed several days ago by the opposition Labor Party. Many senior officers of the Israeli Army, meanwhile, are reported on the brink of resignation and are telling colleagues that they plan to ask Prime Minister Begin for the dismissal of Defense Minister Ariel Sharon. (Page 5.)

One of the most tortuous takeover battles in Wall Street history was settled yesterday when the Bendix Corporation and the Allied Corporation said they would merge. The battle began last month with a bid by Bendix for the Martin Marietta Corporation. It then took a sudden turn when Marietta - backed by the United Technologies Corporation - made a counteroffer for Bendix, and ended with the unexpected entry and ultimate conquest by Allied. The agreement yesterday means that Bendix becomes a unit of Allied, and Bendix shareholders now will own stock in Allied. Marietta will remain independent. (Page 39.)

In the center rotunda of City Hall is the renowned hanging staircase, so called because it is a completely self-supporting set of steps rising to the building's second floor. It curves round gracefully in two directions from one central starting point, each wide marble tread dependent on the one below it. One side arcs toward the end of the building in which the Mayor has offices, the other toward that side occupied by the City Council President. There seemed only one difference yesterday between the staircase and the plans of the politicians whose offices flank it - that is, that the stone structure was still standing.

A key ingredient in the Cuomo victory was an old-fashioned drive to get voters to the polls. Page 31. City and state vote totals, page 33. By FRANK LYNN Hours after their decisive primary victories, Lieut. Gov. Mario M. Cuomo and Lewis E. Lehrman turned yesterday to new opponents and new issues as an abbreviated six-week gubernatorial election campaign got under way. Mr. Cuomo, the Democratic and Liberal nominee for Governor, told a news conference at his midtown Manhattan headquarters that the economy and Mr. Lehrman's advocacy of ''Reaganomics'' would be the major issues in the campaign.

President Reagan, delivering a spirited defense of his economic policies, accused the Democrats today of mistaking compassion for practical solutions and insisted that voters still endorsed ''the sea change in American politics'' that he said his program had wrought. Addressing a group of trade magazine editors at the White House, Mr. Reagan focused on the economic issue and described the current recession as ''a legacy of the years of spend and spend and tax and tax and even more Americans out of work.'' ''Maybe it's time to ask Speaker O'Neill and the liberal leadership of his party if they really want a return to the policies that gave us a trillion-dollar debt,'' Mr. Reagan declared, referring to Thomas P. O'Neill Jr. of Massachusetts, the House Speaker, in attacking the Democratic opposition in the Congressional elections this November. Counterattack by Speaker Mr. O'Neill later counterattacked, contending that Mr. Reagan's basic policy was ''to stand pat with an economic program that has already thrown millions out of work and threatens the jobs of millions more.'' Both the President and the Speaker addressed the issue of rising unemployment and accused each other of using rival employment and job-training bills as ploys in the November elections.

The United States and other Western countries withdrew their delegations from the final sessions of the annual general conference of the International Atomic Energy Agency in Vienna today in protest after the agency voted to withdraw Israel's credentials. The walkout was in part ceremonial, since the agency had nearly completed its week of meetings. In a statement issued here, the State Department termed the vote to reject Israel's credentials ''unjustifiable and illegal'' and said that the United States was ''reassessing'' further participation in the 110-member United Nations agency. 'Could Have Ramifications' The officials said there would be no further public comment until a full assessment had been conducted, but added, ''The action of the United States could have ramifications for the whole U.N. system.''

A student leader at the University of Nairobi was imprisoned for a 10-year term on sedition charges today, becoming the first civilian convicted in connection with the Aug. 1 coup attempt. Titus Adungosi Oloo, 22 years old, was found guilty of demonstrating in support of air force rebels who seized several areas of the capital. Prosecutors said that during the seven-hour uprising Mr. Oloo addressed students and slum dwellers from a hijacked city bus.

China and Britain agreed today to negotiate the future of Hong Kong through diplomatic channels but did not reach any consensus on the fundamental question of who would have sovereignty over the colony. Prime Minister Margaret Thatcher of Britain, after spending 2 hours 20 minutes with Deng Xiaoping, China's paramount leader, read a carefully phrased joint statement to reporters that said: ''Today, the two leaders of both countries held far-reaching talks in a friendly atmosphere on the future of Hong Kong. Both leaders made clear their respective positions on the subject. They agreed to enter talks through diplomatic channels following the visit, with the common aim of maintaining the stability and prosperity of Hong Kong.''

The United States won a decisive victory on the floor of the General Assembly today, defeating a Cuban attempt to declare Puerto Rico a colony of the United States. The United States won wide backing against the Cuban effort. The 70-to-30 vote with 43 abstentions reflected considerable support from Latin America and Western Europe, and abstentions came from key nations such as India, Mexico, Kenya and Yugoslavia.

AU-PRINCE, Haiti, Sept. 24 (AP) - President Jean-Claude Duvalier has granted executive clemency to Haiti's most celebrated dissidents -Sylvio Claude and 21 followers from his tiny Haitian Christian Democratic Party. The presidential pardon was announced Thursday on Government radio and television during a national holiday marking the 25th annversary of Duvalier rule in Haiti. It did not mention a date of release for the prisoners, who have been held in the national penitentiary for two years.

Guerrillas freed seven more hostages today, and the Government said it expected the rebels' weeklong occupation of the Chamber of Commerce building to end early Saturday. The release of two brothers this afternoon and five other Honduran businessmen late in the evening left 32 people captive, less than a third of the original number.

Eight weeks after the Reagan Administration certified that the Salvadoran Government was making progress in its efforts to redistribute land, agricultural experts and union leaders say the program has bogged down abruptly under renewed pressures from rightist officials. Only 200 provisional titles to land have been given to peasants since July 28, when the Administration certified that El Salvador was making ''continued progress'' in carrying out the land program, according to Government officials. Before certification, in June and July, as many as 4,000 provisional titles, and possibly far more, were given to peasants. ''It's obvious to me that, after certification, there's a lack of interest in completing the program,'' Deputy Agricultural Minister Jorge A. Pena Solano said. ''Before certification we wanted to give an impression to the American people and Government how fast we were giving the titles. Now certification is over.''