HOLIDAYS ARE still a time for families, though they sometimes get lost amid the hassles. Adults are harried, their voices rising as a dozen cousins argue over which Nintendo cartridge to play next. Grandparents make their once-a-year appearances, bearing gifts and often leaving with a bit of melancholy.
OK, so maybe Barry Levinson is right: We can't go back to ''Avalon,'' to the days when kids crowded around Grandfather to hear stories about the family's history.
Yet even if it's too late to save the extended family from extinction, it couldn't hurt to bring back a storytelling tradition. Several new books with Hanukkah and Christmas themes offer stories that can link the generations.
* ''My Grandmother's Stories: A collection of Jewish folk tales,'' by Adele Geras, illustrated by Jael Jordan (Knopf, $17.95; all ages). These stories could belong to anyone's grandmother. Geras has captured many traditional tales, all with morals that aren't too overbearing, and writes them with a grace that will make any parent or grandparent sound like a read-aloud veteran.
In ''Bavsi's Feast,'' about a miser who learns to share his good fortune, she writes of King Solomon's palace: ''The sun was just setting, and the palace walls were pearly in the apricot light of evening.'' Food often plays a supporting role: ''cakes dripping with honey and studded with nuts, and velvety fruits fragrant with luscious juices.'' Jordan's exquisite pen-and-ink and color illustrations make this a future heirloom.
* ''The Power of Light,'' by Isaac Bashevis Singer, pictures by Irene Lieblich (Farrar, Straus and Giroux paperback, $6.95; all ages). Singer, the master storyteller, has collected eight tales, one for each night of Hanukkah. Most celebrate the triumph of goodness and generosity, especially in hard times. But there's also the lighthearted, modern-day account of the parakeet named Dreidel, who has escaped from his home somewhere and has arrived on the windowsill of the Singers' apartment in Brooklyn.
If your family enjoys this book, by all means find a copy of the classic ''Zlateh the Goat and Other Stories,'' written by Singer and illustrated by Maurice Sendak (Harper & Row paperback, $4.95).
* "Just Enough is Plenty," by Barbara Diamond Goldin, paintings by Seymour Chwast (Picture Puffin paperback, $3.95, ages 3-8). This is the story of a family that lives in a village in Poland. Papa is a tailor whose business isn't going very well, and there won't be any coins for the children to play dreidel with this Hanukkah. But Mama is able to stretch enough latkes and applesauce for the family, and when an old peddler comes to the door, they share the rest of the potato pancakes with him.
Not surprisingly, the stranger turns out to be Elijah the Prophet, who leaves a sack full of presents behind to repay the family's unselfishness. Chwast's primitive paintings on canvas include a favorite scene with Elijah, who looks like a character out of the Beatles' "Yellow Submarine."
* "Latkes and Applesauce," by Fran Manushkin, illustrated by Robin Spowart (Scholastic, $12.95; ages 3-7). This is another story about a family "long ago and far away." A huge blizzard comes on the first night of Hanukkah and continues for eight days, and the family can't dig potatoes (for latkes) under the snow.
A stray kitten and a little dog come to the house for refuge from the storm. Everyone survives on thin soup and bread crumbs until the eighth day, when food runs out. That's when the dog and the kitten work their miracles, and the story ends with a Hanukkah feast. At the back of the book, the author explains the history of Hanukkah and includes a recipe for latkes and directions on how to play dreidel.
* "Carl's Christmas," by Alexandra Day (Farrar, Straus and Giroux, $10.95; all ages). If you buy only one book this holiday season, buy this one. Loyal fans of "Good Dog Carl" and "Carl Goes Shopping" won't need any convincing: Carl the marvelous Rottweiler is back to take the baby on a Christmas Eve adventure through town.
Day's warm paintings aren't accompanied by words. Instead, Carl's clever actions carry the story, somehow expressing tenderness and wit that convey far more than words ever could. In this episode, Carl and the baby visit a toy store, give gifts to the needy, join a group of carolers and rush home in time to see Santa.
* "On Christmas Eve," by Peter Collington (Alfred A. Knopf, $14.95; all ages). This is another wordless book full of magic. In delicate colored-pencil panels, Collington tells the story of a little girl who puts her stocking and her letter to Santa at the foot of her bed because she doesn't have a chimney. After she's asleep, a tiny fairy sneaks in through the window, finds the key to the front door and opens it to let in a whole flock of sparrow-sized fairies.