JERUSALEM, Oct. 18 (AP)--The first full day of a cease-fire produced a muddled verdict Wednesday: Scattered clashes kept tensions high on rock-strewn Palestinian streets, but overall violence dipped as Israeli and Palestinian security teams moved to halt three weeks of upheaval.

Faced with Palestinian militants bent on confrontation, the Palestinian leadership issued "strict orders" to observe the truce reached Tuesday at a summit in Egypt. But Palestinian leaders also warned that Israel needed to remove soldiers from the fringes of restive Palestinian cities to end the fighting.

Yitzhak Herzog, Israel's Cabinet secretary, said the cease-fire would test Palestinian leader Yasser Arafat's ability to "exercise governance over the various gangs swarming around and saying vociferously that they don't intend to honor the agreement."

Meanwhile, Israeli security forces arrested six Palestinians suspected of taking part in the mob killing of two Israeli reserve soldiers last week in the West Bank town of Ramallah, according to Israeli security sources. Israeli and Palestinian leaders both refused to comment.

Israel radio said one of those tracked down by Israeli agents was the Palestinian man who emerged from the killings with blood-coated hands triumphantly raised in the air. The photograph appeared on newspaper front pages worldwide.

Details of the operation were shrouded in secrecy, but in Israel the news was greeted with grim satisfaction. Israelis were horrified by television footage of the attack, and Prime Minister Ehud Barak himself had promised: "We will settle accounts."

Israel's security forces have a long tradition of methodically hunting down those they consider responsible for terrorist attacks against Israeli citizens. After the massacre of 11 Israeli athletes at the 1972 Munich Olympics, the Mossad spy agency spent years tracking down and assassinating PLO leaders it held responsible.

The timing of these arrests was explosive, coming to light only a day after Israel and the Palestinians promised at a U.S.-brokered summit to try to calm the violence that has been raging for 21 days in the West Bank and Gaza Strip. A Palestinian militia leader, Hussein Sheik, said if it turned out that Israeli special forces had entered Palestinian-controlled territory to seize the suspects, it would likely provoke an outburst of fury among Palestinians.

"I think our reaction will be very grave--this gives Palestinians a free hand," Sheik told Israel's Channel One. "Now, you give us the right to go after those who killed Mohammed al-Dura"--a 12-year-old Palestinian boy slain in a hail of Israeli gunfire in the Gaza Strip on Sept. 30 as his father desperately tried to shield him.

So sensitive was the matter--raising questions of whether Yasser Arafat's Palestinian Authority had cooperated with or at least known of the Israeli operation--that the arrests were not even reported in official Palestinian media, and Palestinian officials declined all comment.

Israeli officials, too, refused to discuss the case for the record, but broadly hinted that arrests had taken place and more were possible. "I don't want to go into detail about what has been done, and certainly not on what is to be done...that could only spoil things," Deputy Defense Minister Ephraim Sneh told Israel's Channel Two.

Israeli security sources said the six were arrested overnight from Monday evening until Tuesday morning by commandos from the army's elite Sayeret Matkal unit, which specializes in clandestine operations, assisted by other special Israeli forces.

There was no immediate word on the fate of the suspects. The sources said only that they were in Israel and were being interrogated. Some Israeli media reports put the number of those arrested as high as eight.

In Wednesday's unrest, Palestinian gunmen fired at Israeli troops and rock-throwing clashes erupted at several friction points in the West Bank and Gaza Strip, injuring more than two dozen Palestinians.

Also, an Israeli army officer suffered facial wounds from a firebomb in Gaza. An explosive device went off as an Israeli civilian bus passed near the Jewish settlement of Gush Katif in Gaza, the army said. No one was hurt.

But as of Wednesday evening, no deaths were reported--a rarity in the 21 days of violence that have left 102 people dead, the vast majority Palestinian.

High-level Israeli and Palestinian security officials held meetings Wednesday to implement promises made to President Clinton, who mediated at the summit in Egypt.

Israel said it was encouraged by Wednesday's developments, and eased tight restrictions on the movements of Palestinians.

Authorities lifted the internal closure on Palestinian areas, which prevented residents from traveling between towns inside the West Bank and Gaza. The Israelis also allowed the Palestinians to reopen their airport in Gaza, and opened border crossings to Egypt and Jordan.

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