July 11, 1988

LEAD: In signing a huge arms deal with Britain, Saudi Arabia was trying not only to meet its military needs but to avoid a series of bruising political battles with Israel's strong supporters in the United States Congress.

LEAD: Just two months ago, Vice President Bush was getting a lot of advice from well-wishers and Republican strategists on how to put some life into a flagging Presidential campaign. Now, after the polls have tightened up, Gov. Michael S. Dukakis is getting his turn to hear from the back-seat drivers.

LEAD: In his typically secretive style, Kirk Kerkorian, the reclusive entrepreneur, is again restructuring the MGM/UA Communications Company, according to an executive familiar with the transaction.

LEAD: In a fiscal sleight of hand, the Federal Government has begun delaying payment of Medicare bills by 10 days as a means of stretching out payments and cutting $815 million from this year's budget deficit. On Oct. 1 the delay will be extended to 14 days on the nearly $80 billion of Medicare claims that hospitals, physicians and individuals are expected to file in the 1989 fiscal year.

LEAD: Maxwell's Plum, the flamboyant restaurant and singles bar that, more than any place of its kind, symbolized two social revolutions of the 1960's - sex and food - closed abruptly yesterday. Warner LeRoy, the owner of the 22-year-old establishment on First Avenue at 64th Street, likened its demise to that of an affair that had gone on too long, in the end losing its spontaneity and adventure.