Police removed two names from the list of Spain's most-wanted terrorists, cornering one in a Madrid cafe and killing another in a gun battle in a nearby town, authorities said today.

It was the second police breakthrough in three weeks against GRAPO, an acronym for the Oct. 1 Antifascist Resistance Groups. GRAPO is a leftist terrorist organization that appeared after the death of General Francisco Franco.

Authorities linked the slain Pedro Tabanero Perez and Manuel Parodi Munoz, who was arrested in Madrid Monday night, to six of the 28 assassinations GRAPO has carried out this year.

Tabanera was cornered by police after Parodi led them to a hideout the two had shared in mountains near El Escorial, a 16th century monastery town 30 miles northwest of Madrid.

"I'm wounded," shouted Tabanera as the police closed in on him. "I'm bleeding badly, I surrender."

The terrorist died several hours later in a hospital.

Two other GRAPO members, Alfonso Rodriguez and Carment Lopez Anguita, were arrested three weeks ago. Police said the two admitted being involved with eight acts of political violence, including the bombing of a Madrid cafe last May in which eight people died and about 40 were injured.

The slain terrorist and the three guerrillas under arrest were all on the Spanish Interior Ministry's most-wanted list issued last month.