A bitter dispute between the Army and one of its old soldiers over the Medal of Honor has been taken up by a California Congressman, raising the possibility of a House debate that could center on racism.

Charles M. Bussey, a retired black lieutenant colonel who fought with honor in World War II and Korea, says he was denied the Medal of Honor for heroics in Korea because of discrimination. The Army says he was properly honored with its third highest combat award, the Silver Star, rather than with the highest award for bravery.

Colonel Bussey, then a first lieutenant, led a handful of Army truck drivers in keeping a North Korean unit from outflanking the Army's 24th Regiment in the Battle of Yechon on July 20, 1950. Lieutenant Bussey and his charges, armed with only a .50-caliber machine gun and a .30-caliber machine gun, are credited with killing 258 enemy soldiers in the battle.

The drivers were not in Lieutenant Bussey's unit, the 77th Engineer Combat Company, but he came upon them when he was returning to the front to rejoin his troops. The North Koreans appeared almost simultaneously, and Lieutenant Bussey quickly turned the drivers into fighters. He was also awarded a Purple Heart for two slight wounds. Began Campaign in '80

But Colonel Bussey, now 73 and living in Riverside, Calif., says he was denied the Medal of Honor because a racist white officer vetoed the recommendation.

Colonel Bussey's bravery and his assertions of discrimination were backed by several fellow soldiers. One, David K. Carlisle, a black West Point graduate who served under Colonel Bussey after the Yechon battle, took up the campaign almost...