Leaders of the ultranationalist settlement movement, Gush Emunim (Bloc of the Faithful), announced plans today to begin moving 50 Israeli families into the center of this West Bank city, where much of the last Jewish community was massacred in the Arab riots of 1929.

The announcement triggered a protest by Deputy Prime Minister Yigael Yadin, who said it will increase tension between Jews and local Arabs, and also touched off a strike by Arab shopkeepers and a warning by the acting mayor of Hebron that the settlement plans pose a "serious danger."

Yadin said Prime Minister Menachem Begin told the Cabinet he did not know anything about the resettlement plans, but promised that renovation work being done on once Jewish-owned homes will be stopped if it turns out that the moves by the Jewish families are in contradiction of any previous Cabinet decisions. Begin said the issue would be considered by the foreign affairs and defense committee of the Knesset Israeli's parliament.

On Feb. 10 of last year. The Israeli Cabinet ruled that in principle Jews have a right to settle anywhere in Hebron, although it set no date for implementation of that decision. The decision presented a fundamental shift in Israeli policy, because for 13 years after the occupation of the West Bank by Israel, the military governor prohibited Jews from moving into central Hebron, for fear of Arab-Israeli clashes.

Two years ago, about 20 families from the Kiryat Arba settlement just outside the city moved into the abandoned former Hadassah House in central Hebron, saying they were the vanguard of a massive return of Jews to Hebron.

At first the government condemned the move as illegal "squatting," but then it began providing the settlers with help in renovating the building. Last week, Israel's Supreme Court ruled that the move to Hadassah was legal, since the building was originally Jewish-owned, but the court found that complaints by local Arabs that the settlers have been harassing them were justified, and that the complaints had not been properly handled by the military.

The Israelis' attraction to Hebron stems from a continuous presence of a relatively small community of pious Jews there from the 13th century until 1929, when Arab riots swept Palestin. In Hebron, city of the ancient patriarchs Abraham, Isaac and Jacob, 59 Jewish men, women and children were massacred in one night, and many of them were dismembered by Arabs.

The memory of that bloody year -- and the evacuation of all Jews from Hebron -- lingers with many of the settlers there today and is repeatedly invoked when they justify reestablishment of a Jewish presence in the Hadassah House.

Moreover, the Tomb of the Patriarchs, which is also a mosque, is one of the most sacred sites in Judaism. It is located a few blocks from the Hadassah House, where on May 2, 1980, Palestinian terrorists ambushed a group of settlers who were returning from Sabbath prayers, killing six of them in a burst of machine-gun fire and wounding 17.

The Kiryat Arba religious council said the first of the 50 families to be resettled will move into a building adjacent to the restored Abraham Avinu Synagogue, and the rest would be moved into adjacent buildings to be purchased from Arab residents.

Two Israeli families have already moved next to the synagogue, and the area was sealed off and heavily patrolled today by Israeli soldiers. The settlers has asked the government to turn over to the Ministry of Religious Affairs all houses in Hebron that were once owned by Jews.

Hebron's acting mayor, Mustapha Abdul Nebi Natche said in an interview today that three Arab families were evicted from their home next to the synagogue to make room for the settlers, and that at least a dozen more than left their homes because of harassment by armed settlers from Kiryat Arba. Natche said one family was bought out for $1,000.

Under the 1948 armistice agreement, houses that had been owned by Jews in 1929 came under Jordanian control. When Israel occupied the West Bank, the houses came under the control of the Israeli government.

Gush Emunim leader Rabbi Moshe Levinger said he recently completed a trip to the United States where he raised money to buy Arab-occupied homes in Hebron's old Jewish quarter.

Natche complained that the resettlement drive "threatens Arab existence in Hebron, because there already is no room for new generations of Arabs." He said Gush Emunim intends to gain Jewish control of the city of gradually moving Arabs out.

Kiryat Arba settlers, guarded by Israeli soldiers, have begun to survey a large Arab wholesale vegetable market near the restored synagogue, and Natche said he has complained about it to the military governor's office.

To protest the resettlement, schools closed in Hebron today, and most shops were shut. However, they reopened when an Israeli Army truck with acetylene equipment, normally used to seal shut the steel doors of striking Arab merchants, began patrolling the streets.