Israeli troops opened fire on Palestinian demonstrators today, wounding seven, as riots and strikes spread throughout the occupied West Bank for the third day. Three Israeli soldiers and two tourists also were injured by rock-throwing protesters.

In Cairo, Egyptian Foreign Minister Kamal Hassan Ali said his country is watching the situation in the West Bank with "great concern." Ali told reporters he feared the rioting could jeopardize the Camp David plan for a negotiated settlement on Palestinian autonomy.

Syria announced Sunday that it has instructed its delegation at the United Nations to seek an urgent meeting of the Security Council to discuss the West Bank violence, Reuter reported from Damascus.

Despite stringent security measures imposed following the fatal shooting of a Palestinian teen-ager in a demonstration yesterday, virtually every major town here was swept by violent protests against the military government's decision Thursday to dissolve the city council of El Bireh, the West Bank's fourth largest city.

The most serious clash today occurred at the Aksaw refugee camp, near Ramallah, where about 400 youths attacked an Israeli patrol with rocks, according to Army officials. A spokesman said soldiers first fired tear gas, then shot at the legs of the advancing crowd, wounding two youths.

The Associated Press said four Palestinians were wounded in the Jalazoun refugee camp near Ramallah, where two soldiers were listed as injured. Another soldier was reportedly wounded near the Arab city of Nablus.

Disturbances were also reported in the West Bank towns of Hebron and Halhoul, where another Arab was reportedly shot, and Bethlehem, where two tourists of unknown nationality were injured by rocks thrown by Palestinian youths. Isolated clashes were reported in other towns.

Security forces imposed temporary curfews tonight on most of Ramallah and Nablus and sealed off three refugee camps because of disturbances.

The wave of violence fueled a growing confrontation between the new Israeli civil administration, which ostensibly has replaced the military government that previously oversaw the West Bank, and militantly nationalistic Arab mayors of the territory's principle cities.

The standoff began Thursday when the civil administration, headed by Menachem Milson, dissolved the El Bireh council and ordered security forces to remove Mayor Ibrahim Tawil from his office.

During a demonstration outside Tawil's office yesterday, a 17-year-old Palestinian boy was killed and two teen-age girls wounded when Israeli troops opened fire at the protesters. An Army spokesman said the troops fired after a soldier was struck in the face with a rock and after tear-gas grenades and warning shots failed to disperse the protesters.

In a punitive measure today, the military government issued orders prohibiting all residents of Ramallah, Nablus and Tulkarm from traveling across the Allenby Bridge, one of two bridges connecting the West Bank to Jordan. For eight hours, Ramallah and Nablus were closed to all traffic, and throughout the day reporters attempting to enter the towns were turned away.

Ramallah's mayor, Karim Khalaf, announced that he and the city council would resign, but later in the day he rescinded the resignations, saying that he would quit "at the suitable moment."

Tawil today obtained a temporary restraining order from Israel's Supreme Court preventing the occupation government from deporting him unless the court holds a full hearing. Israeli authorities said no deportation order had been issued.

Israeli Defense Minister Ariel Sharon, in a report on the disturbances to the Cabinet today, reportedly said that the occupation government would continue to encourage moderate Palestinians in the West Bank to oppose nationalistic mayors who openly support the Palestine Liberation Organization.

Following the meeting, Cabinet Secretary Aryeh Naor told reporters that no decisions were made on the West Bank situation.

The opposition Labor Party, meanwhile, condemned the "bankruptcy" of the government's policy in the West Bank, saying Prime Minister Menachem Begin had attempted to impose on the Arab inhabitants new governments to replace mayors elected in 1976. When that failed, the Labor Party statement said, the government decided to apply the force of the Army.

News Agencies reported the following from Cairo:

Foreign Minister Ali, talking with reporters after briefing President Hosni Mubarak and other officials on his visit to Israel last week, said Egypt's main concern was that the rioting could hurt chances that West Bank Arabs will agree to participate in autonomy talks. Egypt hopes such talks will follow an Egyptian-Israeli agreement on self-rule, a settlement that is supposed to be the next step in the Camp David peace process but has been stymied so far.

"Any backward development in the West Bank area could have a negative effect on the Palestinian participation concerning the future of the negotiations," Ali said. About 1.3 million Palestinians live in Israeli-occupied territories.

Mubarak decided today to dispatch a key foreign policy adviser to Israel for talks on the dispute over the Sinai border and the indefinitely postponed negotiations on Palestinian autonomy.

Egyptian officials said the official, First Foreign Undersecretary Osama El-Baz, would carry new proposals to Israel Monday but would give no details.