American intelligence sources played a key role in providing information that led French police to arrest palestinian terror leader Abu Daoud, according to reliable sources here and [WORD ILLEGIBLE] capitals.

France's quick release of the Black September [WORD ILLEGIBLE] leader Tuesday touched off a storm of international protest led by Israel and by the United States which voiced unusually sharp official criticism on the French move.

[WORD ILLEGIBLE] over the failure of the French to follow through on the reported American tip-off may be [WORD ILLEGIBLE] in the sharp American response, qualified sources in Europe indicate. France officially [WORD ILLEGIBLE] the American attitude toward the case yesterday.

Franch continues to keep secret the exact circumstances that led to Abu Daoud's arrest.

But new details provided by Prime Minister Raymond Barre in an interview with Agence France-Presse, by French newspapers and by Western sources in Europe suggest that the Iraq passport on which Abu Daoud was traveling was spotted as a phony by other Western intelligence agencies, who gave that infromation to the DST, France's counter-espionage agency.

American counter-terror agents, whose aid was sought by French authorities when they were not able to identify members of a Palestinian group that came here last week to attend the funeral of a slain militant, reported provided the first information that Abu Daoud was among them.

The Americans recognized the alias of Yussef Hanna Raji and the Iraqi passport he used as having been used before by Abu Daoud, according to an authoritive report reaching here. Other services later provided similar information, according to this report.

U.S Central Intelligence Agency Agents who form part of an American counter-terror task force have helped keep watch over the international movements of Palestinian extremists and their associates since two U.S. diplomats were murdered by Black September terrorists in Khartoum, Sudan, in March 1973.

Barre told Agence France-Presse last night that the DST on Jan. 7 "asked several foreign police services" for help in identifying the Palestinians. "These routine checks led them to the conclusion that Yussef Hanna Raji was in fact Abu Daoud," Barre added, and he was picked up that night.

Asked if American services had provided information, Barre's press spokesman referred the query to the Interior Ministry, where a spokesman said he could neither confirm or deny such a report since "the police will not discuss such matters,"

Previously, the French had issued statements suggesting that West Germany had first identified Abu Daoud. They have now dropped the suggestions. The DST's close links with Israel's Mossad intelligence service had also raised press speculation that Israel had tipped off the French.

The 39-year old Palestinian, whose real name is Mohammed Daoud Audeh, is suspected of having been one of the planners of the terror attack on the Israeli Olympic team in Munich in 1972 in which 11 Israeli athletes and five terrorists died.

A French court Tuesday rejected Israeli and West German requests to hold Abu Daoud from formal extradiction hearings. The court ruled in effect that the Palestinian had been arrested without sufficient proof that he was in fact Abu Daoud and could be held any longer.

Abu Daoud arrived here Jan. 6 as part of a Palestine Liberation Organization delegation to attend the funeral of a slain militant, Mahmoud Salah. Such a voyage is highly unusual for Abu Daoud, a key figure in the most radical wing of Yasser Arafat's Patah guerilla movement and whose 6-foot-4 height makes him relatively easily identifiable.

The afternoon daily de Monde today quoted "authorized sources" - a press sobriquet here for French government officials - as saying that the DST had discovered that Salah had flown to Baghdad a week before his death and returned with documents outlining a campaign of opposition to Syria's occupation of Lebanon. He was shot by unknown assailants on Jan. 3.

Evidently fearing that a new terror exploit could grow out of Salah's murder and funeral, the DST ran an intensive identity check on the PLO delegation that requested visas but failed to spot Abu Daoud, according to the account in Le Monde and independent reports.