Tensions rose throughout the West Bank and a general strike paralyzed this Arab city today as the Israeli government imprisoned Nablus Mayor Bassam Shaka and ordered him deported. The Israeli action was taken on the basis of a disputed allegation that in a private conversation with an Israeli military official, Shake expressed approval of a terrorists massacre two years ago.

Shaka's arrest sparked an immediate storm of protest by other West Bank mayors. They said they would resign en masse if the occupation government carried out the deportation of the popular nationalistic mayor of this Arab city, the West Bank's largest.

Nablus' nine-member municipal council resigned in support of Shaka, and a general strike immobilized the city. Tensions were high as heavily armed Israeli Army patrols cruised through the streets, occasionally chasing rock-throwing youths.

If Shaka is deported, he will be the first high-ranking Palestinian political figure to be expelled from the West Bank in more then three years.

The decision to imprison and deport Shaka comes at an awkward time for Israel, which has been seeking, without discernible success, to court Palestinian support for the Israeli-Egyptian negotiations for limited autonomy in the West Bank and Gaza strip.

An Egyptian delegation is due to arrive in Tel Aviv Tuesday to resume subministerial autonomy working sessions amid reports from Cairo that Egyptian President Anwar Sadat is ready to offer several significant compromises, including the dropping of demands that East Jerusalem be included in the autonomy scheme. Israel annexed East Jerusalem after the 1967 War and does not consider it part of the West Bank.

The arrest of Shaka and the threatened mass resignations of the remaining West Bank mayors could embarrass Sadat in the face of his reported willingness to make concessions to Israel in the talks.

Meanwhile, Israel's Cabinet voted unanimously today in support of the principle of expanding existing Jewish civilian settlements and building new ones in all of the occupied territories, although it did not specify how many outposts will be built. Agriculture Minister Ariel Sharon, however, said the decision will mean 10,000 new settlers in the next year.

As if to illustrate the divisions in Israel over the government's settlement policies, about 150 members of the "Black Panther" -- movement -- low-income Jewish immigrants mostly of Dephardic, or oriental origin -- protested at the Elazar settlement south of Bethlehem. Their contention is that the government is spending too much on settlements and not enough on welfare programs.

Mayor Shaka was arrested this morning when he was summoned to the office of the military governor and presented with an explusion order that reportedly alleged incitement to riot. After being allowed to telephone his family, he was taken to Ramle Prison near Tel Aviv, where he will be kept until Israel's High Court of Justice rules on a temporary order restraining his expulsion that was issued in the case last week.

Nablus Deputy Mayor Zafir Masri said in an interview that the city's 1,500 municipal employes will continue to work for the time being but will refuse to cooperate with the Israeli military if it attempts to control municipal services.

Masri charged that Shaka's arrest is part of a "scheme" by the Israeli government to force nationalistic mayors out of office and weaken the Palestinian independence movement in the West Bank.

"All of the present mayors are against" the Camp David accords, "including autonomy, so we are not a party to those talks. Maybe they [the Israelis] are thinking of trying to force us to be a part of the negotiations, but we will not," Masri said.

At a meeting of several hundred Shaka supporters at the municipal hall this morning, Ramallah Mayor Karim Khalif was cheered when he called Nablus "the core of the nationalist movement," and vowed to resign if Shaka is deported.

Among those also threatening to resign were Gaza Mayor Rashid Shawa, Hebron Mayor Faad Kawasma, Jericho Mayor Abu Aziz, Halhoul Mayor Mohanned Milhem, and El Biera Mayor Irahim Tawil.

Shaka became the center of controversey when he was quoted as having told Army Gen. Danny Matt, coordinator of the occupied territories, that acts of terrorism such as the massacre on the coastal road near Tel Aviv in March 1978, were justified as long as Palestinians were denied independence. In the attack, 34 people were killed.

Shaka denied he had defended the massacre, saying that in his closed-door meeting with Matt, held at Matt's request, he said that as long as Israeli troops occupy the West Bank and as long as Israel attacks Palestinian civilians in southern Lebanon, Israel must expect armed actions by Palestinian organizations.

A transcript of the conversation, confirmed by the Army, shows that Matt repeatedly pressed Shaka on whether or not he justified extreme terrorist attack.

After repeated verbal duels on whether he supports terrorism, Shaka, according to the transcript, finally said, "I believe that there is a chance that such actions will bring results and this is because of the situation we are in."

West Bank political leaders complained bitterly today that Shaka's remarks were made in private converation and that it was Matt who was guilty of incitement for leaking the contents of the talk to the Israeli press.

Government sources said Defense Minister Ezer Weizman had sharply reprimanded Matt, who did not report the conversation to his superiors before an account appeared in the Israeli press. However, the decision to deport Shaka, sources said, was made jointly by Weizman and Prime Minister Menachem Begin Friday.