A fire that swept through a two-story Northeast Washington house early yesterday killing three persons and seriously injuring three has been ruled "suspicious" and is being investigated for arson, according to police and fire officials.

The house at 511 58th St. NE was being renovated at the time of the fire, according to a police source. Although the building was supposed to be vacant, several people who did not own the house were allowed to stay there during the renovation, according to the source.

The source said that there was an argument at the house Thursday and that it may have occurred after the people temporarily living in the house were asked to leave and some of their belongings were removed.

The arson squad and homicide unit of the D.C. police department are investigating the fire, police said.

A spokesman for the D.C. fire department said the fire has been ruled "suspicious and is under investigation," but declined to give additional information.

Fire officials said they are having difficulty identifying the three victims because "their bodies were badly charred."

Of the three who were injured, two remained in critical condition at the Medstar unit of Washington Hospital Center. Leo Watkins, 32, suffered second- and third-degree burns on 35 percent of his body, according to Joseph Daniels, public affairs officer at the hospital.

James Catterton, 45, was listed in critical condition at the hospital.

A third man was taken to D.C. General Hospital, according to the fire department spokesman. However, a hospital spokesman said "no one suffering from injuries resulting from a fire" was brought to D.C. General.

The death toll is believed to be the highest in a fire in the District since March 23 when a 52-year-old man and five children were fatally injured in a blaze at a foster home in Southeast Washington