Palestinian guerrilla leader Abu Daoud, accused of masterminding the 1972 massacre of the Israeli Olympic team in Munich, has been arrested by French secret service agents, French police said today.

Israel and West Germany are both considering requests for his extradition.

Black September guerrillas attacked the Olympic Village in Munich in September 1972. In the attack and a subsequent confused shootout at an airport, 11 Israeli athletes and team officials, a West German policeman and five guerrillas died. Three commandos survived and were subsequently set free in exchange for hostages aboard a hijacked West German airliner. Accounts differ on whether Daoud was in West Germany when the raid occurred. He was not among the three arrested then.

Daoud's arrest came quietly, in an expensive Paris hotel, on Friday. He reportedly had met earlier in the week with a high French official but under an assumed name. It was not his first arrest - he was picked up in Amman, Jordan, just five months after the Munich massacre. After two unsuccessful efforts by Palestinians to free him through seizing hostages, King Hussein amnestied him in September 1973.

Diplomatic pressures were quick to come again today. The Syrian ambassador, dean of the Arab diplomatic corps in Paris, protested the arrest as an "unfriendly gesture toward the Arab world," diplomatic sources said, and other reports said that Libya, Iraq and Algeria also protested to the French government.

In Belrut, a top leader of the Fatah Palestinaian movement, Abu Iyad, said that certain members of the French government "want to damage relations between the Palestinian resistance and France." Iyad was speaking at a rally in memory of former Palestine Liberation Organization representative Mahmoud Saleh, shot to death outside his bookshop in the Paris Latin Quarter six days ago.

"Israel and certain French organizations should know that we will not remain silent on these two crimes, the murder f Saleh and the arrest of Abu Daoud," sid Iyad. PLO leader Yasser Arafat, who also heads Fatah, was among those at the rally.

Daoud, 39, came to Paris as part of the PLO delegation attending Saleh's funeral, police said. According to other sources, he was part of a fourman delegation that was inquiring about police investigation of the killing and, using the name of Youssef Kadji, was received by a high-ranking Foreign Ministry official.

French police meanwhile discovered Daoud's real identity, cheeked through Interpol with West German colleagues that an international arrest warrant was still valid and then arrested him, the sources said.

"Daoud, who had an Iraqi passport, did not resist being arrested," the police spokesman said. He stressed that Daoud faces no charges in France.

"French justice will have to decide on a possible extradition request. If there is no extradition demand with 18 days, France will have to release him and send him to the country of his choice," he said.

In Bonn a spokesman for the West German Ministry of Justice said the French had arrested Daoud on an international warrant issued shortly after the 1972 Olympics attack. The spokesman said a decision on whether to demand Daoud's extradition will be made early in the week.

Bonn apparently is taking its time in making the decision. West Germany would prefer that some other country - such as Israel - be given custody of Daoud.

Aside from the effects of Daoud's extradition on Bonn's relations with the Arab world, any involvement in the war between Israel and the Arab guerrillas complicates West German efforts to wipe out the stain of Hitler's treatment of the Jews.

West Germany has twice been the target of Black September efforts to free Palestinians or their supporters from German jails.

On Oct. 29, 1972, two Black September guerrillas hijacked Lufthansa's Damascus-to-Frankfurt flight and threatened to blow it up unless the Germans freed the three Arab terrorists who had survived the Munich operation. The Germans delivered the three men to the hijacked plane in Yugoslavia. They were flown to a hero's welcome in Libya.

In March 1973, a Black September commando group stormed the Saudi Arabian embassy in Khartoum, Sudan, killing one Belgian and two American diplomats. One of the six demands made for the lives of the surviving embassy guests was the release of the leaders of West Germany's pro-Arab Badder-Meinhof anarchist gang. The Khartoum terrorists eventually gave up. Since then, West Germany has quitly rid itself of unwanted Arabs by deportation.

In an editorial, Israel's influential Meariv newspaper today asked: "Is Germany now ready to take onto itself the risk of holding one of the leaders of Black September in a German prison?"

A member of the Israeli Parliament said that a motion would be debated in Parliament this week calling on the Israeli government to seek Daoud's transfer to Israeli jurisdiction.

"I expect wide support for the motion," said the sponsor, Shmuel Tamir. "After all, who can say no?" He said it would be the first use of the law extending Israeli jurisdiction to crimes committed against Israelis outside their country. The Israeli foreign office had no immediate comment.

Eric Silver of the Manchester Guardian reported from Jerusalem on Daoud's arrest in Jordan almost four years ago:

In February 1973, a Jordanian security patrol stopped a car in central Amman. The driver claimed he was a Saudi Arabian Sheikh and that the 15-year-old girl with him was his wife. His passport showed him to be the father of six children.

The police were suspicious and took him for questioning. His "wife" panicked and dropped a gun and clips of ammunition. They were arrested and the "husband" was identified as Muhammed Daoud Odeh, better known as Abu Daoud.

Daoud was on a mission against the Jordanians, who had driven out the Palestinian resistance in "Black September" of 1970. He had been sent by Abu Iyad, Arafat's deputy, to prepare to kidnap King Hussein's ministers "to prove our presence."