BOSTON--As a small group of pro-choice demonstrators led by activist Bill Baird picketed outside, more than 500 people crowded Faneuil Hall yesterday to hear Cardinal Bernard Law lead a rally against abortion.

The 16th Annual Assembly for Life also marked the 16th anniversary of the 1973 Supreme Court decision legalizing abortion. The rally was sponsored by the Massachusetts Citizens for Life, Inc.

"It is clear that the pro-life movement is here to stay," said Law, head of the Catholic Archdiocese of Boston. "There is no way in which the human spirit will long endure a moral evil like abortion. Those of us who recognize abortion as the taking of innocent human life do not find that with the passage of time and millions of more deaths we are less committed. Far from it. I find myself today more convinced than ever that the killing must stop."

Law was one of several speakers at the event, which included Mayor Raymond L. Flynn, Massachusetts Citizens for Life President Ruth Pakaluk and Rabbi Samuel Fox, president of the Massachusetts Council of Rabbis.

Flynn read a proclamation declaring yesterday "Respect for Life Day" in Boston.

"We are sending a clear message about protecting the rights of all people," said Flynn.

Pakaluk cited the 16th anniversary of Roe v. Wade, the Supreme Court decision legalizing abortion, expressing optimism that it would soon be overturned. But she said the antiabortion movement will continue even if the high court decides abortion is illegal.

"The reversal of Roe [will not be] the victory we hoped," said Pakaluk. "There's a long way to go before we reach the end. If the Supreme Court reverses Roe v. Wade, the state legislatures will still be able to write laws."

Pakaluk called Roe v. Wade the "most disastrous" decision ever made by the Supreme Court.

Outside Faneuil Hall, a small group of pro-choice protesters chanting and carrying signs, and led by longtime pro-abortion activist Bill Baird picketed the building. Opposite them, a group of about 40 anti-abortion protesters walked in an identical circle as a cadre of police officers watched.

"I warn you now, we are in danger of losing the abortion law," said Baird, who came with about 20 members of the Boston-based Pro-Choice Defense League.

Baird blamed the Reagan Administration and the conservative mood that has swept the country for strengthening the anti-abortion movement.

"The idea is to keep women out of the labor market," said Baird. "The key word is control--the control of women."

Following Sunday's rally, many of the anti-abortion activists planned to leave for Washington D.C. to join the national March for Life scheduled for Monday.