Much as they hate to say it, a lot of people in Cambridge are once again fighting the battle over the John F. Kennedy Library. The project slated to be built in the 4.2 acre-site adjacent to the Kennedy School of Government--a $60 million residential/retail complex--is different, the issues are much the same.

Community groups are claiming that construction in the area--known as Parcel 1B--will make traffic and air pollution levels in Harvard Sqare unbearable, if not unsafe. The project, originally suggested in May 1977, is still tied up in a series of state and local hearings and reports aimed at assessing its impact on the Square.

Although a state planning board recently gave its sanction to the project, the state's office of environmental affairs must still review a draft of an environmental impact report (EIR). And a source in that office says that the office, which will issue its recommendations this week, may ask for the EIR to be rewritten from scratch.

Once the office of environmental affairs is satisfied, the state secretary of administration and finance must still hold his own public hearings and issue a final decision. Most observers say that ground-breaking ceremonies for the complex, designed by the Cambridge Kennedy Square Associaties, are at least a year away.

In its approval, the planning board answered some of the community's fears by cutting the maximum allowable retail space by about one quarter. As approved, the Carpenter development would have about 65,000 sq. feet for shops and about 25,000 sq. feet for restaurants and "entertainment facilities"--an area three times the size of the Galeria and double the floor space of the Garage.

Dean Johnson, president of the Harvard Square Defense Fund, says the draft EIR is "very inadequate," adding that he fears "the air pollution impact is going to be very, very severe."

Carbon monoxide levels in Harvard Square, he explains, are already "worse than anywhere else in the state--including the mouth of the Callahan Tunnel." Johnson says that additionl development, especially on the scale of the Carpenter proposal, will make a bad situation worse.

Richard Friedman, president of Carpenter and Co., defends the draft EIR, saying that he has never seen "such an exhaustive study."

Friedman, whose company was selected from among 17 firms that originally submitted development proposals, says the price tag on the project has gone up one-third from original estimate. "We knew it would be a slow process," Friedman says, "but nobody anticipated how slow it would be."

Depending on whom you believe, business in the Square will either be fatally hurt or boosted by the Carpenter complex. James A. Argeros general manager of the Harvard Cooperative Society, says "a substantial amount of retail space would adversely affect our business."

Argeros says the site should be developed according to a program that will not cause additional traffic. "It's tough now," he says, adding that "if access to that place is going to be through Harvard Square, it's going to be hard to walk."

Other businessmen also fear additional congestion. Frank A. Cardullo, who runs the Wursthaus restaurant, says the promised 760 additional parking spaces will be a blessing. "For 37 years," he adds, "they've been promising us parkng facilities."

The Neighborhood 10 Association will sponsor a discussion on the development of Parcel 1B, Thursday night at 8 p.m. at the Friends Meeting House.