Army troops and tanks moved into the city of Abadan yesterday in an attempt to control rioting over the deaths of almost 400 persons in a cinema fire that the government says was set up by Moslem fanatics.

Tanks and armored vehicles took up positions in strategic points of the Persian Gulf city as demonstrators - many weeping and in black-clad mourning clothes - spilled the streets.

Initial reports said sporadic shooting was going on between demonstrators shouting antigovernment solgans and security units in Abadan.

The demonstrations began Tuesday night when mourning ceremonies for the fire victims turned into a riot.

Many of yesterday's demonstrators were relatives of fire victims, press reports said.Some windows were smashed and three persons were arrested, but no injuries were reported.

The Abadan police chief, Brig. Gen. Reza Razmi, denied making a statement attributed to him that the theater had been bombed, touching off the fire. That report was carried by the government broadcast service.

Police have been quoted variously as saying the fire was started by gasoline or other explosive material poured around the theater or by fire-bombs planted inside.

Razmi was called to Tehran Tuesday night to report on the investgation. The government said a commmission was appointed by Prim Minister Jamshid Amouzgar to take over the investigation.

Radio abadan on Tuesday quoted Razmi as saying that five of 10 persons arrests after the fire have confessed to the crime.The government had no comment on that report, and Razmi's disclosure of the progress of the investigation was thought to be a reason for his being summoned to Tehran. Such details normally are not released by authorities until the investigation is finished.

His recall also followed complaints by Abadan residents that police and firemen were too slow in reaching the fire.

The official Pars news agency said, "At 9 p.m. (Tuesday) night about 2,000 inhabitants of Abadan who had gathered at Hosseiniyeh Esfahaniha - a praying place - to attend mourning ceremonies for those killed in the Rex Cinema fire, left against the advice of clergyman."

The demonstrators smashed the windows of two banks and were dispersed by the police, Pars said, then another group started demonstrations and attacked police.

Witnesses said the demonstrators forced police and municipal officials out of mourning ceremonies at the Abadan cemetery Tuesday, accusing them of making "political capital" out of the disaster.

Special correspondent William Brazigin reported from Tehran:

Complaints about the handling of the blaze by the Abadan fire and police departments are rising tension in the southwest Iranian oil city and there is a growing body of opinion that the government may have instigated the fire to stir up a backlash against opposition groups.

There is no proof for this allegation, but that does not seem to matter in a country beset by rumors, deep cynicism toward officialdom and an inherent belief in intrigues.

The government has accused "saboteurs" and "unidentified protestors" of setting the blaze, but officials say privately that they suspect Moslem fanatics or hardcore terrorists. No matter who was responsible, the government appears determine to make political capital out of the tragedy.

There was also allegations tha tpolice hindered rescue efforts and may even have been responsible for locking the movie theater's doors, trapping most of the audience inside.

This further fueled widespread speculation that the government was responsible for starting a fire.

"I think it's all part of a plan to be able to tell the Iranian people, "look, you're not ready for democracy so we have to keep the monarchial system we have," said a yound bank teller, expressing what seems to be a popular opinion here.

Moderate political leader Karim Sanjabi told a news conference in Tehran last night that he had no "correct information" on the fire, but that it reminds him of the 1933 Reichstag fire in Germany as Hitler was coming to power. The Nazis blamed the sabotage on their Communist foes and made significant propaganda advances, but were later considered to have set the blaze themselves.

Reports from Abadan said an estimated 10,000 people gathered for the burial ceremony Tuesday and many became hysterical with grief. Press accounts said some mourners were so overcome that they poured earth on their heads, writhed in the dust and beat their faces with both hands as their relatives and friends were buried.

Meanwhile in Tehran the U.S. embassy has alerted all Americans to "maintain the lowest profile possible" in the coming days amid fears that mounting anti-government violence in the country could turn against Westerners.