An explosion that demolished a Palestinian building killing an estimated 150 to 200 people early yesterday remained a mystery last night, but guerrilla leaders privately blamed a Palestinian splinter group closely allied with Syria.

The explosion shortly after mid-night collapsed an entire nine-story apartment building and part of an adjotting structure in what appears to be the bloodiest incident so far in a continuing battle between radical and mainstream Palestinian organizations.

Rival factions officially denied yesterday that the powerful explosion, apparently triggered by a blast in a parked car that detonated munitions cachesinside the building, was part of the feud within the Palestinian movement.

While the building was the head-quarters of the pro-iraqi Palestine Front, it also housed offices of the rival Fatah, headed by Yasser Arafat, said at least 10 of its members were killed in the explosion.

The Palestine Front, headed by Abul Abbas, who was away from the building at the time of the explosion, and Fatah both accused Israel of involvement, but offered no evidence.

Senior guerrilla sources made it clear, however, that really suspect the Popular Front for the Liberation of Palestine-General Command, led by a former Syrian army captain, Ahmed Jebril.

Not only does Jebril's group have its own quarrel with the Abul Abbas faction, but it is virtually a commando expension of the Syrian military, sources say. In the Byzantine world of Arab politics, they add, there are several reasons why Syria would want to keep a bitter dispute between moderate and pro-Iraqi Palestinian groups on the boil.

As rescue workers toiled to extract bodies from the rubble of the destroyed apartments, the Palestine Front issued a communique saying it "does bot accuse any Palestinian party or carrying out the bombing and affirms its accusation of forces hostile to the Palestinian revolution."

The Palestine Liberation Organization, dominated by Arafat's Fatah group, made a similar statement. The PLO added that a meeting of all its factions decided to launch an investigation and take "security measures" to avoid further such incidents.

In an effort to defuse tension, Arafat canceled a rally at the Lebanese coastal town of Damour, where groups of the pro-Iraqi "Rejection Front" had also scheduled ceremonies marking Palestinian "resistance" at the Tal Zastar refugee camp near the end of the 1975-76 Lebanese civil war.

At the scene of the explosion, heavily armed Fatah and Palestine Front guerrillas jointly cordoned off the area and manned roadblocks on surrounding streets. They helped rescue workers using bulldozers and a crane to search for victims under huge slabs of concrete.

Pieces of clothing were still clinging to twisted steel reinforcing bars protruding from the crumbled concrete blocks, and household items were strewn amid the debris.

The facades of other buildings on all four sides of the demolished structure were also damaged, both by the force of the blast and by flying chunks of concrete and steel.

Even in a country so accustomed to violence, the explosion was unique. Diplomats called it the worst act of sabotage ever to occur in Lebanon and said it marked a sharp escalation of the inter-Palestinian conflict.

Palestinian sources said the damage was so great because the explosive charges was placed against guerrilla ammunition depot in the basement of the complex. The huge basement, common to three buildings, also housed a paint thinner factory that fueled a large fire for hours afterward.

"The explosion literally made my bed jump off the floor," said a Dutch photographer who lives in a nearby building. "I ran to the window and looked out and the whole sky was just red with flames. It was incredible."

The blast occured shortly after Abul Abbas had left a meeting in the building. He was unhurt, but other members of the group and their families were killed ot injured, sources said.

Abul Abbas broke with Ahmed Jebril's group when Syrian forces entered Lebanon in June 1976 and began fighting on the side of the Palestinians' Christian rightist foes. Jebril refused to confront the Sytians, but Abul Abbas wanted to fight them, so he formed his own group with Iraq's backing.

Thus the quarrel between the two also refects the longstanding dispute between the rival Baath Socialist parties in Baghdad and Damascus, according to political sources here.The Syrians, they say, want to keep Iraq on the defensive, especially since a bloody conflict between Iraq and the PLO was showing signs of cooling down. Morever, the sources said, the Syrians have always wanted to keep the PLO under some kind of control and may have felt Fatah was becoming too diminant over other groups.