U.S. Secretary of State George P. Shultz said Friday he was stunned by Greece's decision this week to free a suspected Palestinian terrorist whose extradition was long sought by Italy.

"The release of this terrorist is shocking," Shultz said of Abdel Osama Al-Zomar, who is wanted in Italy for involvement in a 1982 attack against a Rome synagogue that killed a 2-year-old boy and injured 34 people."We cannot mince words or in any way shirk the actions we have to take" to combat international terrorism, Shultz said. "This release is bad . . . and I am shocked by it. When a known terrorist like this is released, it's shocking."

He spoke after a two-day meeting of the NATO foreign ministers.

Al-Zomar, 27, was arrested when he arrived in Greece in 1982 and served 20 months in a Greek jail for arms smuggling. His extradition was approved by the Greek Supreme Court in 1984 but never carried out. Al-Zomar was sentenced to another 20 months in 1987 for having a knife in his jail cell.

On Tuesday, Greece put Al-Zomar on a plane to Libya. Justice Minister Vassilis Rotis said Greece did not extradite him "because Al-Zomar was acting in the struggle for the . . . independence of his country," referring to the Palestinian fight for a homeland in Israeli-occupied territory.

Both Greek and other Western intelligence officials believe Al-Zomar belongs to the terrorist group of Abu Nidal.