President Reagan's hand surgery on Saturday is to correct a condition called Du-puytren's contraction, a mysterious, progressive thickening of palm tissue that can pull fingers into crooked and useless claws.

The procedure, generally considered minor surgery and performed under local or regional anesthetic, is to start early Saturday and is expected to take three hours or less. Reagan, however, will remain in Walter Reed Army Hospital overnight.Dr. Robert J. Neviaser, chairman of the orthopedic surgery department and director of the hand surgery service at George Washington University Medical Center, said Du-puytren's contraction is a fairly common problem in men of Irish or Scottish ancestry. Reagan is a descendant of Irish immigrants.

Dupuytren's contraction, named for a 19th-century French surgeon who first characterized the condition, is caused by a buildup in the palm of the hand of a tissue called fascia. This tissue slowly forms tough, rubbery nodules and bands that extend from the palm into the fingers. The fascia joins to the skin of the palm and contracts, forcing the fingers to close.

"You can close the finger into the palm, but it gets to where you can't open the finger or fingers that are involved," said Neviaser. "After a while it becomes difficult to place your hand into a pocket or a glove because you lose the ability to straighten the finger. It leads to a loss of function."

The ring finger - the digit next to the smallest finger - is most commonly affected. Reagan's problem is with the ring finger on his left hand. Untreated, the condition eventually may involve all four fingers but the thumb, leaving the hand in a clenched, clawlike position.

To relieve the contraction, Ne-viaser said surgeons make an incision over the area in the palm where the band of tissue has formed. The fascia is carefully separated from the skin and removed. The incision in the skin then is stitched back together.

"It's a tedious operation," said Neviaser, who is not involved in the treatment of Reagan. "It can take anywhere from a half an hour to two hours or more."

Neviaser said only the tissue directly involved with the finger contraction is removed.

"This means you might end up leaving behind what appears to be an uninvolved portion which later on would become involved," he said. "So it can reoccur and other fingers can become involved later."

If the procedure goes well, said Neviaser, Reagan should be out of bandages within two weeks, perhaps in time for the inaguration of President-elect Bush on Jan. 20. In minor cases, full recovery with return of all function can occur in a month.

Severe cases, however, can take much longer, said Neviaser, and can sometimes require splints to help the fingers straighten out after the contracted tissue is removed.

Neviaser said the palms have a special type of fascia that usually forms a thin, protective layer.

When the problem occurs, "for reasons that are not quite clear, there is a cellular activity that changes the fascia, causing formation of bands and nodules. The skin becomes thin over the fascia and the contraction of the fingers start," he said. "We don't know what causes it."

Though the hand surgery is generally performed on an out-patient basis, Neviaser said it is reasonable for Reagan to be kept overnight after the operation. That, said the doctor, is the conservative, medically preferred way of handling the procedure, and the way it was done for years. It became an out-patient procedure only after insurance companies stopped paying for overnight hospital stays.