KHANIA; A SMALL TOWN IN CRETE THAT CURVES AROUND A LOVELY HARBOR

Crete has its concrete tourist jungles like any other Mediterranean island - but not where we are staying. Here in the ancient capital we breakfast on tiny black olives, ewe's milk yogurt doused in honey as thick and dark as caramel, home-baked bread dried in the sun to become a toasty rusk, and tea blended from dittany and other herbs.

Our introduction to the traditional Cretan breakfast was at the Doma Hotel, enjoying a modest ''B'' rating, but one of those rarities, a family-owned hotel run to a special standard. Irene Valiraki, the proprietress, spent her childhood in the hotel when it was still her family's home before World War II.

We almost stumbled on the Doma during a stroll along the Khania (pronounced Hania) waterfront. Madame showed us around the hotel with its simple and spotless rooms, locally made wooden furniture on board floors scattered with hand-woven rugs, the white walls hung with paintings and family pictures going back a century.

Then she sat us down at a table overlooking the Bay of Khania and served hot drinks in the Cretan manner - with a side plate containing a small green orange bathed in syrup and nestling in a gleaming silver spoon.

In such a setting you cannot escape talking about history, and madame told us about the Doma as by turns it became the British Consulate in prewar Khania, was taken over by the Germans after their daring airborne invasion of Crete in 1941, and then, after the war, gained a new lease on life as a hotel.

Khania was badly battered during the war and the scars remain, but so do other traces of the past. The old town is clustered around the harbor and embraced by fortified walls built by the Venetians, who held Khania from the 13 th to the 17th century. It was wrested from them by the Turks.

Within the walls is a maze of back streets. The Church of St. Francis, restored to something of its former beauty, houses the Archaeological Museum, containing pottery, weaponry, and jewelry dug up around Khania and mostly dating from Minoan times. One of our favorite exhibits is of toys played with by Khania children a thousand years BC.

In the harbor, at one end of a long breakwater, stands a reminder of Crete's century and a half of Turkish occupation: the mosque of Hassan Pasha, now serving as an information office for the contemporary invaders, tourists.

The port is studded with many simple tavernas where fresh fish (normally a rarity in Cretan restaurants), squid, and chicken are always on the menu.

The other focal point is a vast covered market built in the shape of a cross where every conceivable fresh fruit and vegetable in season is brought in daily from the surrounding countryside and other parts of Greece.

Cheeses sharp or sweet, hard or soft, eggs from hens that still roam freely around every village and farmhouse, poultry, rabbits, fish, cherries, melons, peaches, a local variety of small yellow pears - for us daily shopping is a delight as well as a necessity.

During a spell in a self-catering villa we often dined on tender zucchinis cooked in local olive oil, combining them with shiny purple eggplants and fresh tomatoes in the most delectable ratatouille we have ever eaten. With chunks of fresh bread baked in the old city bakery only hours before and a bottle of spring water, it is (and probably was) food for the gods.

Serious pollution is still alien to this part of Crete, though tiny blobs of oil we pick up on the soles of our feet while roaming the many quiet beaches betray the presence of motor ships.

Khania is on the isthmus of the Akrotiri Peninsula, and our villa interlude was spent on the peninsula itself, on the edge of a tiny bay lapped by limpid blue waters. The bay is not even marked on any map and is so far nameless. Only those Cretans who have summer houses there and a handful of tourists know its whereabouts.

It is far from being the only bay of its kind. If you take the road marked ''Airport,'' it forks left past a small village, Kounoupidhiana. Along the coast are several beaches, some suitable for windsurfing.

The same road leads on to an even more secluded rural scene, where the only signs of human habitation are lone shepherds' cottages surrounded by beehives producing that rare nectar, the heavy Akrotiri honey famous throughout Greece.

One evening we stopped at a local store and with the help of a dictionary asked for honey and cottage cheese. Both were available, fresh that day.

The road passing Kounoupidhiana leads to another sign posting the way to one of the most important monasteries of Crete, the Ayia Triadha. A hard-surfaced driveway through extensive plantations of olive trees brings you to an imposing, and surprising, entrance - the edifice of a Venetian nobleman's mansion built in the classic style.

The Ayia Triadha was founded in the 17th century by a Venetian who converted to Greek Orthodoxy but built his monastery in the style he knew.

The monastery is said to be in decline, but on entering the church, beside old frescoes we found a whole new series of modern ones following the precepts of ancient icons but an unmistakable product of the 20th century. Visitors are allowed in the morning and from 5 to 8 p.m.

There is an icon collection and library which can be viewed by prior arrangement. We were content to enjoy the peace and quiet of a timeless sunset hour in the company of an aged monk and two dogs exhausted by the heat of the day.

Apart from beaches and monasteries, there are many small villages in western Crete where tourists are still greeted as guests (the Greek language, we learned , uses the same word for ''guest'' and ''stranger'').

Some of the villages saw brutal and desperate fighting, not only in the distant past, but in World War II. Monuments hewn in stone and beautifully tended by the local people record the thousands of fallen - men from Britain, New Zealand, Canada, and, of course, Germany.

At the hillside village of Galatas we came upon a monument to 140 New Zealanders killed in a clash with Germans. We wondered how such violence could have occurred in a spot so tranquil and remote.

But the grandest monument at our end of the isle of Crete was gouged from the rocky mountains by nature itself. The Samaria Gorge is one of the longest true gorges in Europe and is now a National Park where neither smoking nor picking wildflowers is permitted.

To us it is one of the last places in Europe where to breathe is pure delight. You can actually taste the air of the Samaria Gorge - it is perfumed with the scent of flowers and wild herbs.

The gorge walk is 19 kilometers (about 12 miles), mostly downhill, along a path carved for thousands of years through stern granite by cool mountain streams. It takes you from Omalos (altitude 6,000 feet) down to the sea. At the top the gorge is about 150 feet wide; toward the end at the sidheroportes (iron gates) it narrows to 8 feet, with rock walls 1,000 feet on either side.

A few years ago only an experienced guide and his donkey could find a safe footing through this home of wild mountain goats. Today a safe trail over rocky terrain, crisscrossing mountain streams many times, is well marked. There are rest areas and cool stream water to refresh you on your way.

To get to Omalos, the starting point, you can take a public bus. We took the earliest - it leaves from Khania at 5:15 a.m. and the journey to where the trek begins takes an hour and a half. This means you can set out down the gorge as dawn is breaking and complete the walk (if you are reasonably fit and nimble) just in time for lunch at Ayia Roumeli.

From there regular ferries take you to another port, Khora Sfakion, where tourist and local buses await the hardy hikers. A warning: the walk is arduous.

There is a bonus, too, for those intrepid enough to accomplish the Samaria Gorge walk. A little more than halfway along this ''grand canyon'' you come across the ancient settlement of Samaria - a few cottages and stone huts within a granite perimeter wall.

Samaria is being discreetly restored. More than the famous Minoan settlements of Knossos, Phaistos, and Malia farther east in Crete, Samaria seems real. Sipping stream water from cupped hands, we thought long and hard about the rugged islanders who had made this grand setting their home thousands of years ago. Practical information:

Khania is about a two hour drive from the airport in Iraklion. The Doma Hotel , in Khania, charges from $15 to $20 per night for two people without any meals. The best time of year to visit Khania is from April to October. For more information, contact the Greek National Tourist Organization, Olympic Tower, 645 Fifth Avenue, New York, NY 10022.