October 17, 1986

The Israeli Air Force and Navy launched large-scale attacks today against suspected Palestinian guerrilla bases in southern Lebanon and the police said an Israeli fighter jet had been shot down by ground fire. [ An Israeli Army spokesman in Jerusalem confirmed that a fighter jet had been shot down while attacking Palestinian bases near Sidon. The spokesman said one of the fighter's two pilots was rescued in a ''quick and daring'' mission by Israeli attack helicopters. The other pilot was still missing, the spokesman said. ] Earlier the Lebanese police said the two pilots had been taken prisoner by Lebanese Shiite militiamen. Other reports said they had been captured by Palestinians in the area. Jets, Helicopters and Boats Israeli jets continued to fly over southern Lebanon after the raid, while Israeli naval vessels steamed up and down the Sidon coastline, according to witnesses. The witnesses said Israeli helicopters were also seen.

FOR anyone puzzled by painters and sculptors - by their creative minds and by the gritty question of how they live and survive and sometimes thrive in New York today - an ''open studio'' is just the thing. And this month, with several large open studios being held around the city, is just the time. The open studio is similar to an ''open house'' tour: visitors, carrying a map that indicates where the participating artists work, walk from studio to studio. There, in lofts or apartments or converted garages, the artists have a selection of their work on display. And visitors are encouraged to ask whatever questions come to mind. This weekend, one of the city's largest and longest-running of such events will be held at 41 Union Square West, an office building filled almost entirely with artists.

James M. Buchanan, a 67-year-old professor at George Mason University in Fairfax, Va., won the Nobel Memorial Prize in Economic Science today for his pioneering development of new methods for analyzing economic and political decision-making. The five-member selection committee cited Dr. Buchanan as the leading researcher in a fast-growing field of potential significance known as ''public choice theory.'' The selection surprised some mainstream economists because Dr. Buchanan's work straddles the boundary between economics and political science, raising issues not traditionally dealt with in the economics discipline. Basic Principles Applied It strives to explain government policy decisions by the application of basic principles, just as traditional economic theory explains how consumers and businesses make choices. ''Buchanan is the father of public choice theory,'' said Leif Lewin, a professor at Sweden's University of Uppsala and a member of the selection committee.

In the latest management shake-up at CBS Inc., Peter A. Derow, president of the CBS Publishing Group, is leaving the company along with 14 members of his executive staff, CBS confirmed yesterday. Mr. Derow, who has been with the company since 1981 and whose departure had been rumored, will continue as a consultant to CBS on publishing. However, the departure of Mr. Derow and his executives represents the dissolution of the entire corporate publishing staff. Peter G. Diamandis, president of CBS Magazines division, and Harry A. McQuillen, president of CBS Educational and Professional Publishing division, will report directly to Laurence A. Tisch, the acting chief executive of CBS.

Just over two years ago, in accepting an award at Rhodes College in Tennessee, James M. Buchanan struck a plaintive note that suggested he had largely given up any hopes of obtaining the public recognition he suddenly gained today as a Nobel laureate in economics. ''I have faced a sometimes lonely and mostly losing battle of ideas for some 30 years now in efforts to bring academic economists' opinions into line with those of the man of the street,'' the austere scholar, who is now 67 years old, said. ''And economists are an intellectually stubborn lot.'' Yet he had already begun to see his tenets - once regarded as only semi-respectable ideas about how economics interacts with the political process - blossom into a major school of thought with disciples scattered around the world. And some of those disciples were busy applying them in the upper reaches of the United States Government.

Donald D. Lennox, the 67-year-old chairman and chief executive who steered the Navistar International Corporation away from the brink of bankruptcy, said today that he would step down, and the company announced a surprising succession plan that aims to satisfy the two chief rivals for his job. Navistar, formerly the International Harvester Company, also announced a sweeping recapitalization plan in which the company would increase its fully diluted common shares outstanding by 70 percent, or 110 million shares. Under the plan, the Chicago-based company, the nation's largest maker of medium- and heavy-duty trucks, would pay off a large chunk of its debt, slashing its debt-to-capitalization ratio to 27 percent, from 88 percent.

Friday TIBETAN SINGING BOWL ENSEMBLE The newer music gets, it often appears, the older it becomes. The case in point is a concert tonight featuring a new composition performed by the Tibetan Singing Bowl Ensemble, with a soloist playing the shofar, the ram's horn employed in Jewish High Holiday rites, and the Tibetan human thighbone trumpet. The contemporary piece, ''Music for an October Moon,'' was written by Raphael Mostel and was inspired to celebrate a time when visible and invisible worlds are in closest conjunction. The Tibetan Singing Bowl Ensemble consists of a half-dozen players who make their music with bowls, which are bell-like instruments made of certain alloys that produce a singular sound and trace their ancestry to mythical Himalayan times. The soloist is Dan Erkkila. The performance is at 8 o'clock tonight at the New York Open Center, 83 Spring Street (219-2527). Admission: $9; students and over-65's, $8.

Looking to recoup some of the $4.5 billion it took to rescue the Continental Illinois Bank and Trust Company of Chicago, the Federal Deposit Insurance Corporation announced today that it planned to sell 50 million shares of the bank to the public by the end of the year. The move would be the first step by the Government to end what was the largest Government takeover of a bank in history when Continental almost collapsed two years ago. L. William Seidman, chairman of the F.D.I.C., said in a speech at the National Press Club that the agency would sell about 30 percent of its Continental holdings in a public offering before the end of 1986, and would attempt to sell the rest over a period of time. Loss Greater Than Expected He said the Government's eventual loss on the bailout would be close to $1 billion. That is at least $200 million more than originally expected.

BASEBALL, hot dogs and apple pie are three things every American is supposed to love - and certainly every politician. ''Two out of three ain't bad,'' Mayor Koch said yesterday, referring to the hot dogs and the apple pie - although, frankly, he would prefer a little schnecken, a kosher pastry, to the apple pie. Mayor Koch knows next to nothing about baseball and has always conceded it. This has not been a major problem in recent years, when New York baseball always turns into something of a sore subject.

There is a stadium in Boston with a Green Monster. There is a stadium in the Bronx with monuments. There is a stadium in Chicago with ivy on the walls and a bar across the street where fans have been known to reach bliss beyond measurement by breath analyzer. Shea Stadium, home tomorrow evening of the first game of the 1986 World Series, has none of these.

The Senate gave initial approval Thursday to a $576 billion comprehensive appropriation bill for 1987, and worked into the early morning today as Congress pushed to finish for the year. But the compromise package, approved by a voice vote, remained subject to amendment. One amendment, to delete $151 million for the T-46A jet trainer, which is built on Long Island, led to a filibuster by the two Senators from New York. This caused the Senate to be stalled late into the night, when the filibuster was set aside so other amendments could be considered. Senate Adjourns Early today the Republican leadership failed to resolve the deadlock and the Senate adjourned until later today.

Andrew P. O'Rourke unexpectedly telephoned a radio call-in program featuring Governor Cuomo yesterday, setting off a bitter five-minute broadcast exchange - in effect, their first debate of the gubernatorial campaign. ''I'm telling you this, Governor, and I've told you all along: No. 1, I'm not sending you a blasted thing,'' Mr. O'Rourke said, referring to the Governor's demand that, before any debates are agreed to, he turn over to Mr. Cuomo his income-tax returns and a list of any clients he represented before Westchester County agencies while serving as a county legislator. ''You have no right to levy any requirements on anybody in this state for any kind of disclosure,'' Mr. O'Rourke went on, his voice angry. ''I wouldn't give you my income tax. I wouldn't give you my client list if I had it.''