The Supreme Court agreed Monday to decide if the religious use of peyote is protected by the First Amendment's guarantee of freedom of religion.

The court will hear arguments next term in the case brought by Oregon seeking review of state court rulings.This is the court's second look at the case that involved two American Indian drug abuse counselors who sought unemployment benefits after being fired for using peyote.

In other action, the court:

-Granted a government motion to participate in oral arguments in the Missouri abortion case. The government, while not directly involved in the case, has been urging the court to overturn its historic Roe vs. Wade ruling legalizing abortion.

-Cleared the way for the proposed joint operating agreement between the Detroit News and the Detroit Free Press pending an appeal. Under a JOA, the Free Press and News would merge business operations while keeping separate editorial staffs.

-Refused to become involved in another portion of the bitter Yonkers desegregation case, declining to hear a case brought by Yonkers Racing Corp., which is fighting court proceedings forcing it to sell a parking lot to the city to be used as a public housing site.

-Let stand two court decisions that threw out libel suits filed against Larry Flynt's Hustler magazine by two anti-pornography activists.

The peyote case originally came before the court in 1987. It involved Alfred Smith, a Klamath Indian and a member of the Native American Church, and Galen Black, also a member.

The two, drug counselors employed by the Doughlas County Council on Alcohol and Drug Abuse Prevention and Treatment, were fired for eating peyote, a cactus button containing the hallucinogen mescaline, which is illegal in Oregon.

The drug is used by members of the Native American Church as part of a religious ceremony.

As part of their employment with the council, both men agreed to avoid all substance abuse. However, both ingested peyote at religious ceremonies in 1983 and 1984 and were fired from their jobs.

They applied for unemployment benefits and they were approved, based on a ruling they were not fired for good cause but because of their religious beliefs in violation of constitutional rights to freedom of religion. The granting of unemployment rights was upheld in state courts.

However, the state brought the case to the Supreme Court, which, in April 1988, refused to decide whether the Constitution reached the issue and, on a 5-3 vote, sent the case back to state court. The court ordered the state supreme court to decide if the religious use of peyote is prohibited by state law.

Justice John Paul Stevens, writing for the court, said a "substantial number of jurisdictions have exempted the use of peyote in religious ceremonies from legislative prohibitions against the use and possession of controlled substances."

"Neither the Oregon Supreme Court nor this court has confronted the question whether the ingestion of peyote for sincerely held religious beliefs is a form of conduct that is protected by the federal Constitution from the reach of a state's criminal laws."