Police arrested several Palestinians Tuesday after a turncoat bodyguard armed with an AK-47 assault rifle killed PLO leader Yasser Arafat's two top aides and held two other people hostage for six hours.

A senior Palestinian commander in Tunis said the gunman was a former member of Abu Nidal's terrorist PLO faction, sworn enemies of Arafat.But "we still don't know who he's working for," the commander said. "He may also be working for the Israelis."

The gunman fatally shot Salah Khalaf, Arafat's second in command, and Hayel Abdel-Hamid, the Palestine Liberation Organization's security chief, at Abdel-Hamid's house outside Tunis late Monday, police said.

He also killed Abu Mohammed Al-Omari, Khalaf's chief bodyguard, and held Abdel-Hamid's wife and teenage daughter hostage, the PLO commander said on condition of anonymity.

The death of Khalaf left Arafat as the sole survivor among the three original founders of Fatah, the first PLO group and its largest faction.

In the Israeli-occupied territories, Palestinians angered by the slayings and blaming Israel took to the streets, hurling stones at soldiers and raising black flags of mourning. At least 21 Palestinians were wounded.

The assailant, Hamza Abu Zid, had demanded a plane to fly to an unspecified destination before PLO guerrillas and Tunisian police stormed the house in the suburb of Carthage and arrested him, the PLO commander said.

The two hostages were freed unharmed from the six-hour ordeal, he said.

Police described the slayings as a settling of scores by rival Palestinian factions. They arrested an unspecified number of Palestinians, "all known to the PLO," Tunisian radio reported.

Abu Zid had recently split from Libyan-backed PLO dissident Abu Nidal, a terrorist leader engaged in a bitter feud with Arafat, and been assigned as a bodyguard to Abdel-Hamid.

But PLO security sources in Tunis and the organization's U.N. representative, M. Nasser Al-Kidwa, blamed the killings on Israel, which denied involvement.

"The Israelis are the only ones which gain interest through such terrorist actions," Al-Kidwa said.

In Israel, Defense Minister Moshe Arens emphatically denied his country was behind the killings.

Israeli sources have acknowledged that Israel was responsible for the April 16, 1988 attack that killed Khalil Wazir, deputy commander of the PLO, although government officials have not confirmed the slaying.

Arafat was on his way from Jordan to Paris for talks on the Persian Gulf crisis when he was informed of the assassination by radio, the PLO commander said.

The PLO leader then canceled his visit, said Daniel Bernard, a French Foreign Ministry spokesman. The PLO commander declined to reveal Arafat's whereabouts.