Syrian peacekeepers pounded Palestinian camps in the southern section of Beirut with tank artillery, mortars and, machine guns today.

It was the second straight day of clashes between the Syrians, who make up the bulk of the Arab Peacekeeping Force in Lebanon, and the extreme leftist Rejection "Front of Palestinians, whto oppose any peace settlement that allows for the continued existence of Israel.

Syria - backed by Egypt and Saudi Arabia - is trying to restoe peace among the Palestian goups to bring a United Arab Delegation to peace talks in Geneva.

In another development, Israeli Prime Minister Yitzhak Rabin told a meeting in Tel Aviv that Syrian units would be withdrawn from Nabatiyeh in southern Lebanon starting next week.

Rabin credited diplomatic assistance of the United States in producing an agreement under which the Syrians would pull out.

As seen from Beirut, the crisis over the stationing of a small Syrian force in southern Lebanon appears to have been a tempest in a teapot.

A tour of the area Thursday showed the Syrian force to be largely defensive - sent out, according to diplomatic sources here and in Damascus, in an attempt to control the large Palestianian guns aimed at Israel and at the Israeli-supported, largely Christian Rightists villages along the border.

Israel apparently decided it would rather face the 155-millimeter howitzes of the Palestinians, set atop the ancient Crusader fortress of Beaufort Castle, than the 500 Syrian soldiers and 10 Syrian tanks scattered within nine miles of its border.

From Beirut it appears that the Israeli diplomatic attack against the Syrian forces in southern Lebanon was politically motivated to live the government a chance to show in the coming election campaign that it sttod up strongly to Arab troops near its border.

Today's fighting was the heaviest since the civil war ended in mid-November and produced the fiercest clashes within the Palestinian camps since just before Christmas, when the pro-Syrian Saiqa Palestinian organizaton fought pro-Iraqi Rejection Front groups.

Once again, today's battle around the teeming Sabra Palestinian camp between Beirut and the airport was between Saiga and a pro-Iraqi group, the Popular Struggle Front.

The difference between today's fighting and earlier battles was the strength of the Syrian intervention. Whereas previously the Syrians restricted themselves to small arms and machine-gun fire, today their tank guns and mortars blasted Rejection Front strongpoints.

But the Syrians did not send a force of tanks and men into the camp according to Kuwaiti Ambassador Abdoul Hamid Baijan, whose embassy is on the outskirts of the camp.

He said the Palestinians at first fired back at the Syrian tanks with armor-piercing grenades, but by this afternoon their resistance was crushed.

The announced cause of today's fighting appeared minor: Saiqa forces tried to enter the office of the Popular Struggle Front in the camp where about 50,000 Palestinians live and where most Palestinian groups maintain headquarters.

Today's battle also helped the Syrians gain military control over the Palestinians in Lebanon.

According to both Palestinian and rightist sources, Saiqa has been provoking incidents within the camps to give Syria an excuse to crack down on the Palestinian Rejection Front organizations.

In other Middle East developments:

U.N. Secretary General Kurt Waldheim said Israel has rejected any compromise on participation in any form of the PLO at renewed Middle East peace talks and it was now up to Secretary of State Cyrus Vance.

Arriving in Cairo from Jerusalem on the last leg of a Middle East tour, Waldheim conceded he had failed in his mission to persuade Israel to accept a compromise on the participation of Palestine to get the peace talks started again.

"All the parties are serious regarding resumption of the negotiating process. The question is on what conditions. There are still differences. The PLO is one of them," Waldheim said.

Waldheim said in Jerusalem earlier that he had conveyed to Israeli leaders compromises proposed by the Arabs and PLO leader Yasser Arafat but that Israel was adamant against even symbolic PLO representation at a renewed Geneva peace conference.

Iraq denied reports that it had closed its borders with Syria and Kuwait and said that a Damascus newspaper account of clashes in Mosul, a northern city, was also untrue. Syria and Iraq are ruled by rival factions of the Booth Party, and tensions between them have led to border closings in the past.

West German Foreign Minister Hans-Dietrich Genscher arrived in Cairo on a one-day visit for talks on the Middle East situation and bilateral relations. He was greeted on arrival by Egypt's Foreign Minister Ismail Fahmi.