Times Staff Writer

The American Film Institute kicked off its fourth festival of European films here Friday with stars Catherine Deneuve and Charlton Heston and an announcement that the festival will now become an annual event.

The festival, which features top films from 12 European Community nations, along with appearances by some directors and stars of the films, opened here Friday and will travel to Chicago and Los Angeles.

Officials of AFI, which is celebrating its 20th anniversary, say this year's celebration marks the first time that such a festival will be held concurrently across the country.

In the past six years, AFI has presented three film festivals here in conjunction with the European Community--the new name for the European Economic Community--the last one in 1985.

Jean Firstenberg, director of the independent nonprofit organization, said AFI hopes that the annual tribute to European film will become a major American touring festival that is "recognized around the world for both its artistic quality and nationwide exposure."

Firstenberg and others launched this year's festivities at a luncheon that included many of the festival's participants.

The roster was selected by AFI after its programmers screened films from each country. Included are films from Belgium, Britain, Denmark, France, Italy, the Federal Republic of Germany, Greece, Ireland, Luxembourg, the Netherlands, Portugal and Spain. Most of the films are having their American premiere in the festival.

Among them are "Family Business," the French entry directed by Costa-Gavras; "Withnail and I," the British entry written and directed by Bruce Robinson (author of "The Killing Fields"); the award-winning "Caravan Serai" from Greece; "Reporter X" from Portugal, directed by Jose Nascimento; a Jacques Brel documentary from Belgium, "Brel, A Shout," and "La Storia" from Italy with Claudia Cardinale.

Bonita Granville Wrather, AFI chairman, likened the European film festival to a "celebration of the power and beauty of the art of international film making." AFI President Charlton Heston, who is also serving as one of the festival's two honorary chairmen, said he considered film to be "the most international of all art forms" because it can reach all levels of society and transcends political and economic boundaries.

"Film is the binding cultural glue around the world," said Heston, noting that he has made about 25% of his films in other countries, mostly Europe.

Heston's co-chairman, Prince Antoine de Ligne of Belgium, the country whose turn it is to chair European Community activities for a six-month period, said he hoped moviegoers would flock to the films because many of the works originate in countries where Americans have their roots.

Heston will conduct a seminar that the festival program describes as "the opportunity to share his reflections on the formative events and significant people that helped to shape his worldwide film career."

Photographers' cameras clicked nonstop for the 44-year-old Deneuve who wore a conservative dark gray suit and seemed bemused by all the attention. Deneuve, who will conduct a seminar on acting, says she has so many demands for her time from various groups and causes that she finds she has to be increasingly selective about what she does. "Otherwise I would be traveling half the year," she said.

Over lunch of salmon and fresh asparagus, Deneuve and Heston talked about films and subjects such as the colorization of old films. Both said they didn't particularly care for the newly colored versions of old films.

Italian actress Giulietta Masina, who was expected, along with her husband, director Federico Fellini, to be the festival's guests of honor, had to cancel her appearance because she is recovering from a recent leg injury, AFI officials said.

Following its Kennedy Center run (June 5-17), the festival will go to the Music Box Theatre (June 12-18) in Chicago and then move to Los Angeles (June 19-25) at the Monica 4-Plex in Santa Monica.

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