THE PHOENICIANS. Splendor of an ancient culture seen in new exhibition; story by Christopher Andreae

THE banner on the fa,cade of Venice's elegant Palazzo Grassi announces to the never-ending flow of gondolas, barges, and water buses on the Grand Canal: ``I FENICI.'' The Phoenicians are in town. In the roofed-over courtyard of the 18th-century palazzo, a great dune of red sand rises up to greet a sea of visitors. Carved heads and figures of sarcophagi are half buried in the sand, as if waiting for archaeologists to dig them out. In another exhibition room, ancient Phoenician vessels float upon a large pool of water.

A staggering array of artifacts from this diverse culture is displayed here - from pottery to multicolored glass necklaces, from grotesque terra-cotta masks to softly painted ostrich eggs, from gold jewelry to carved ivories, from stone statuary to small bronzes.

They tell the story of a once-widespread people.

The Phoenicians were Iron Age merchants of great renown. They were admired by classical writers for their seamanship; they were in great demand for their skill as builders; they were the first people who could be called colonialists. They laid the foundations of the Western alphabet.

And these were the worshipers of Baal found in the Bible's Old Testament who dramatically lost a contest with the monotheistic Israelite prophet Elijah.

Italian scholars in particular claim to have made great strides in the last 25 years in the study of the Phoenicians; thus the staging of this show in Venice.

And the exhibition (continuing through Nov. 6) is clearly designed to give visitors the most complete possible overview of the ancient civilization, in every country in which it appeared.

Nothing so comprehensive has ever been tried before.

The Phoenicians, variously called the ``Canaanites'' or the ``Sidonians,'' achieved a recognizable identity by about 1200 BC. Their beginnings were in the Mideast, in what is now Lebanon. Tyre and Sidon were Phoenician (or ``Punic'') cities; and it was with cities rather than a ``nation'' that they identified themselves as they spread across the Mediterranean. It seems they had only a vague sense of national unity.

In fact, despite all the recent archaeological and scholarly advances, Sabatino Moscati, the exhibition's scientific director, still admits that ``there is no such thing as a clear-cut, broadly accepted definition of the Phoenicians.''

The Greeks, as far back as Homeric times, used the word Phoinikes for the people and Phoinike for the region. There is a link between these names and the noun phoinix, meaning purple-red: the Phoenicians were famous for their skill in dyeing fabrics purple.

In even earlier Mycenean texts (2nd millennium BC) the adjective po-ni-ki-ka has been found. It means red and refers to a chariot.

One concern of the Venice show is to defend the Phoenicians against some of the ``bad press'' they received in some less-than-friendly ancient records. The roguish image of their trading methods, for instance, is suspect.

Though they were colonialists, territorial conquest was not necessarily the prime motive for their expansion. Their sea voyages were largely searches for raw materials to be turned into craft products.

Similarly, the longstanding reputation these polytheistic worshipers have had for brutal child sacrifice is now thought to have been much exaggerated.

The Phoenicians' attitude toward religion, though decidedly primitive, was basically protective in aim rather than sacrificial, the scholars say.

The artifacts on display here come from a variety of international sources, though the scholarship for the show is mostly Italian. The elaborate design of the show itself is also the work of an Italian - the imaginative Gae Aulenti. Ms. Aulenti was the architect responsible for the notable transformation of the Gare D'Orsay in Paris from train station into museum, and for the adaptation of the Palazzo Grassi itself (opened in 1986).

For the Phoenician show, Aulenti has had appropriate texts and quotations painted directly on the walls with the casualness of graffiti. The thin print used in these legends serves to remind visitors of the Phoenicians' contribution to the forming of the Western alphabet. Though they had no vowels in their alphabet, they managed to reduce the myriad Egyptian signs to a mere 22 letters. It was left to the Greeks to introduce vowels into writing.

In all, this exhibition takes a nebulous subject by the horns and presents it to the public with style. We visit Lebanon, Sardinia, Cyprus, Sicily, Malta, Tunisia (where ancient Carthage was), and Iberia. We witness the mutual influence of the Phoenicians and their adopted colonies. Their art and artifacts were influenced on the one hand by Egypt and on the other by Greece. But they adapted to local traditions and crafts, too. They were great manufacturers and exporters of what the Greeks dubbed athyrmata, or knickknacks. There seem to be hundreds of little scarabs, amulets, earrings, and pendants in the glass cases.

As eclectic as the Phoenicians were, a real individuality emerges in their masks. Found mostly in tombs, these fanciful physiognomies seem to have had a funerary function, rather than a theatrical one. But they are nonetheless full of vigorous life and apparent humor. Another delight is the terracotta votive figurines - bell-shaped deities or people with primitive rolled-clay arms.

Certain striking things stand out among this medley of objects: a massively amorphous statue of a deity called ``Bes,'' whose obese form mysteriously energizes the great spongelike worn mass of sandstone in which it is carved; a smooth basalt statue of a seated lion; a tall, 2nd-century BC statuette of a lion-headed female.

Near the end of the show is an extraordinary Greek sculpture of a Phoenician youth. This tall, sinuous marble figure was discovered on the Island of Motya in 1979 by a team of archaeologists from Palermo University. Believed to date from the 5th century BC, it has a languidly posed heroism. It vividly symbolizes what Vincenzo Tusa (in the exhibition catalog) calls ``the meeting between the Greek and the Phoenico-Punic civilizations - the two elements that for centuries determined the history of the Mediterranean, that history which is our history.''