Police entered the black squatter site of Nyanga outside Cape Town early this morning and arrested about 1,500 men, women and children who for the past month have defied government orders to leave the area and return to their impoverished rural districts.

Black Affairs Minister Pieter Koornhof said today that the arrests, which took place peacefully from 6:30 to 10 a.m., were made to "defuse" the situation and because the squatters "continued to make demands which could lead to confrontation."

The action follows the squatters' rejection Monday of an offer by Koornhof to allow those who already had jobs, but not their families, to remain in Cape Town and to help others find jobs in other parts of the country. The squatters refused to accept this, because they want jobs in Cape Town and want to say with their families.

Police have not disclosed how many people were arrested, but lawyers and community workers assisting the squatters estimate that between 1,400 and 2,000 people, including women, children and babies, were taken to Polsmoor Prison outside Cape Town. They said about 200 of the families' makeshift houses were demolished.

One attorney giving legal aid to the squatters said he had been told by authorities that those squatters who come from the "independent" homeland of Transkei are going to be charged under a law dealing with illegal immigrants that will allow them to be summarily "deported" back to Transkei without a hearing. Lawyer Andrew Dalling said he was told this by an official of the department that deals with black affairs in Cape Town.

This would be the first time this legal maneuver has been used to stop black migration to the white-controlled cities of South Africa, a matter usually dealt with by the "influx control" or "pass" laws.

Invocation of the act would highlight the consequences of the "independence" granted under Pretoria's apartheid system to the three tribal homelands of Transkei, Venda and Bophuthatswana.

This independence, which is recognized by no government but Pretoria, automatically deprives the homeland residents of their citizenship in South Africa, technically making them "foreigners" or "immigrants" in white-controlled South Africa. Most of the squatters in the settlement are from Transkei.

Such an action, Dalling said, "indicates that one of the purposes of the homeland policy is to slough off black South Africans. Apartheid may be dead but Hitler is very much alive and well," he added.

Opposition liberal politician Helen Suzman today described the Nyanga scene as "grotesque."

"This must be the most sterile way of handling a breakdown in negotiations which one could imagine," she said.

Dalling said it would appear the authorities are trying to get around the time-consuming trials that have been forced upon them by the lawyers representing the more than 1,100 squatters arrested at Nyanga over the past month and charged with being in the Cape Town area illegally under the "pass law." The trials have slowed down the forced return of the squatters to their rural homes.

Today's police action follows attempts to force the squatters to leave by arresting them, tearing down their makeshift plastic shelters and, for a day or two at least, stopping food from being delivered to them.

Koornhof, who three years ago allowed the people in the nearby squatter settlement of Crossroads to remain in Cape Town, appears to be determined not to allow another site to be built at Nyanga.

Backed by churches and other community groups in Cape Town, the squatters have refused to leave the site since they arrived July 13, saying they cannot find jobs in Transkei and want to remain with their spouses who have jobs in the city.

A visitor to the site early this morning who asked not to be identified said police arrived at about 6:30 and cordoned off the barren, muddy field on the windswept flats stretching out from Cape Town's Table Mountain. They arrested all who had slept there last night. The people were in good spirits, singing, dancing and praying as they peacefully entered police vans, the witness said.