An Egyptian military force flew to Cyprus last night in an effort to free hostages held by two Arab terrorists and was attacked by Cypriot National Guard troops in a violent battle that left several Egyptian commandos dead.

The two Arab gunmen, who had killed a prominent Egyptian editor Saturday before seizing 11 hostages and demanding an airplane, surrendered to Cypriot authorities. The 11 hostages and a crew of four all apparently escaped without injuries during the 45-minutes airport battle.

Late last night Cyprus radio said 10 Egyptian soldiers were killed and 22 persons wounded, including seven Greek Cypriots and an Israeli working for West German television.

Nine Egyptian commandos holed up abroad a Cyprus Airways' DC9 jetliner on the airport's runway also surrendered to Cypriot officers. Cypriot guardsmen were reported to be rounding up a few remaining Egyptians around the airport.

Cyprus accused the Egyptians of arriving under false pretenses and charged that they "made their move without prior authorization" and "despite a warning" from Cyprus President Spiro Kyprianou. A government statement also said Kyprianou had telephoned U.N. Secretary General Kurt Waldheim to protest the Egyptian action.

In Cairo, a government spokesman denied Cypriot charges and said that Prime Minister Mamdouh Salem of Egypt had "contacted the Cypriot authorities and informed them that an Egyptian plane would go to Cyprus to help in releasing the hostages."

The spokesman, Information Minister Abdel Moneim Sami, said "the Egyptian force was taken by surprise when the Cypriot National Guard opened fire on it" He said 60 Egyptian commandos took part in the operation "fighting both terrorism and the Cypriot force."

Despite this, he said, the Egyptian force succeeded in freeing the hostages.

Sami acknowledged that there were casualities on both sides and he charged that the Cypriots fired "a tank shell at the Egyptian plane, destroyed it, then attacked the Egyptian commandos."

The Egyptians' C130 transport landed here about 30 minutes after the captive Cyprus Airways DC8 jetliner carrying the two Arab terrorists and their hostages returned to Larnaca. The plane had been refused the right to land by three countries and had refueled at Djibouti.

The Egyptian commandos immediately attempted to storm the plane. John Bierman of Reuter, who was at the scene, said the Egyptians in sand-yellow uniforms sprinted across the tarmac, firing toward the plane and taking fire from Cypriot guardsmen.

"I saw one Greek Cypriot, appearently an officer, carrying a bolt-action rifle and walking upright and among Egyptian commandos who were lying prone on the tarmac in firing positions. As bullets whistled around him, he seemed to be angrily ordering them off," Bierman reported.

"He forced one Egyptian soldier to his feet and drove him at gun point towards the offices in the terminal building where dozens of foreign reporters and cameramen looked on in amazement.

"Then he fired two shots at the Egyptian, who fell, apparently badly wounded."

At the height of the battle, the director general of the Cypriot Foreign Ministry screamed at newsmen: "Can't you see what's happening? The Egyptians came and attacked us! It's war!"

Kyprianou was in the control tower when the Egyptian plane landed. Cypriot National Guardsmen on the tarmac seemed to be under clear orders to prevent any Egyptian action at all costs. Small arms, heavy machine guns and light artillery of armored cars were all used in the ensuing battle.

The Egyptian U.S.-made aircraft was hit and burned. The Cypriots ordered heavy reinforcements in the action and they pinned down Egyptian soldiers wearing full combat gear and steel helmets around the airport perimeter.

In their official statement, the Cypriots charged that the Egyptians had fired "indiscriminately in all directions" also hitting the control tower where President Kyprianou and members of his government were holding an emergency meeting.

Kyprianou and his aides left the airport and were taken by automobile to the nearby city of Larnaca for safety.

The Egyptians had seemingly decided on an Entebbe-style operation to rescue the hostages and make sure that the assassins of the Egyptian editor Yussuf Sebai, a friend of President Anwar Sadat, did not escape justice.

The Egyptian aircraft landed as the two gunmen began negotiations with Vassos Lyssarides, leader of the Cypriot Socialist Party. The gunmen, who said they were Palestinians, asked Lyssarides to serve as intermediary.

Cypriot sources said the terrorists were asking for Cypriot passports and safe conduct to any Soviet bloc country that would accept them.

The outbreak of fighting between Egyptians and Cypriot troops apparently ended the talks with the terrorists. But when the firing waned, the gunmen and hostages were ordered to come out of the plane carrying their white seat cushions.

Late last night, Cairo Radio announced that Egypt had asked Cyprus to hand over the two gunmen.

The two assassinated Yussuf Sebai, editor of the semi-official Cairo daily Al Ahram in the lobby of the Nicosia Hilton Hotel, where he was attending a meeting of the Afro-Asian Peoples Solidarity Organization. Saturday, Sebai was secretary general of the group.

After the killing, the two seized 11 hostages among the Arab delegates to the conference, holding police at bay with grenades.

The killing of Sebai, a former Egyptian minister of culture, was apparently directed against Egypt's peace negotiations with Israel.

Taking along the hostages, the pair flew off in a marshalled Cyprus Airways plane and attempted to land in Algeria, South Yemen and Libya. All three countries refused to accept them.

In Beirut, a spokesman for the Palestine Liberation Organization denied PLO involvement in the raid.

PLO chairman Yasser Arafat called the assassination a "treason against the Palestine cause," and he warned the terrorists against harming the hostages, two gunmen told captives that "everybody who went to Israel with Sadat will die, including Sadat."

Informants in Nicosia said the two men had come from Beirut last Tuesday and checked into the Hilton, showing passports in the names of Zayed H. Alali, a 29-year-old Kuwaiti, and Reyad Sami Ahad, a 25-year-old Iraqi.

Hotel employees said they were courteous but kept to themselves. Hostages said after their release that the purported Iraqi was extremely excitable, "somewhat morose and better-controlled. At one point, I thought he would shoot the other one if he didn't shut up."

One hostage said the other gunman was [TEXT OMITTED FROM SOURCES] Another hostage said both men eventually apologized to their captives, and the younger gunman was quoted as saying: "We got the man we came for, and we just want to get out of here safely."