A group of men apparently from a nearby Israeli settlement raided this Arab town on the occupied West Bank early today breaking windows and slashing tires of about 40 cars and threatening residents at gunpoint, according to townspeople and municipal officials.

The 2 a.m. attack was the latest in a series of bitter clashes here and in nearby Hebron, where a 23-year-old Israeli settler was murdered last month. It appeared to be part of a vendetta by Jewish civilian settlers from the kiryat Arba settlement, who have demanded the right to move into houses in exclusively Arab Hebron.

Halhoul has been the scene of numerous demonstrations against the occupation of the West Bank by Israel. Following today's raid, students from a girls school pelted a tourist bus with rocks, slightly injuring the driver.

Officials at the military government headquarters said they did not know who participated in the attacks on Arab-owned vehicles, which were carried out by two carloads of armed men.

But every local resident interviewed pointed in the direction of Kiryat Arba on the outskirts of Hebron and complained bitterly that residents there were responsible.

Police tonight said they had arrested an Israeli, described a "former" Kiryat Arba resident, as a possible key suspect in the raid. Kiryat Arba is a center for Rabbi Meir Kahane's militant Jewish Defense League. a