Bethesda jeweler Vahag Babayan testified yesterday he reacted instinctively when he chased a man who had robbed his store and shot the suspect and an alleged accomplice in the middle of a busy downtown street.

"I knew I had to do something," Babayan said. "I was not going to allow him to get away."

For nearly two hours yesterday, Babayan described the "horror" of being robbed at gunpoint on June 16 and fatally shooting two District men as they sat in a parked car.

Speaking in a calm voice, Babayan, 28, told a Montgomery County Circuit Court jury that he believed his actions were justified.

"Death is something nobody is happy about," he said. "I have regrets about what happened. But I don't think I did anything wrong. I did what I had to do."

"Speaking of regrets, he {the alleged robber} had some chance to stop it right there. He didn't surrender. If he did, he would be alive today."

Babayan is accused of killing Donald Shelton, 33, and Steven Jerome Powell, 37. Babayan also is charged with reckless endangerment for firing a weapon in public

The trial, now in its second week before Judge L. Leonard Ruben, has sparked a emotional debate over the limits citizens can go to defend themselves or their property.

On cross-examination yesterday, prosecutor Robert Dean pointed out several discrepancies between Babayan's testimony and a signed statement he gave to police several hours after the incident. Babayan also testified yesterday that the jewelry store had theft insurance and a silent alarm, which he did not activate during the robbery.

Babayan said he was in a state of shock after the shootings. "I was totally numbed by what I had just experienced. It was a nightmare. I thought I would wake up and everything would be okay."

Babayan, who emigrated with his family from Armenia in 1981, said he opened Prestige Jewelers in September 1989.

Babayan said yesterday that a man on crutches, believed to be Powell, who had lost a leg in childhood, entered his store at 7720 Woodmont Ave. about noon and asked about a silver locket. The owner of a neighboring store corroborated Babayan's statements linking Powell to the robbery.

Shortly after Powell left the store, Babayan testified, Shelton came in asking about a bracelet and ring. Shelton left, but returned a while later with a .38-caliber revolver, Babayan said.

"I opened the bathroom door and he was standing there," Babayan said. According to Babayan, Shelton said: "This is a robbery. I have a gun. Be quiet."

Shelton removed jewelry from two showcases and dumped it into a plastic bag, Babayan testified. Babayan said he was then ordered into the bathroom.

After he was certain Shelton had left the store, Babayan testified, he grabbed a .38-caliber semiautomatic pistol he had bought six months earlier for protection.

Babayan testified that he fired once at the fleeing Shelton in an alley. Babayan said he saw Shelton jump into the driver's side of a car parked on Woodmont.

Running up to the car, Babayan testified, "I said, stop. Give me the bag." Last week, a high school student who witnessed the shooting said he heard a man's voice shout, "Stop! Stop!" as Babayan approached the parked car.

Babayan said yesterday he shot Shelton as the man reached for a gun in his waistband. Powell, sitting in the front passenger seat, appeared "to reach for something under the seat," Babayan said. "I believe I fired at him too."

Moments later, Babayan said, Shelton, who had jumped into the back seat, pointed a gun at him. "I fired one more shot."

Babayan said he opened fire on the two men in self-defense. "I faced death two times within five minutes," he said.

During cross-examination, Babayan said Shelton was lying on his back with his hands raised to cover his face as he fired into the car.