Israel dismissed the two most prominent Arab mayors still holding office in the occupied West Bank today and replaced them with Israeli officials. The move touched off a new wave of protests that brought the first death of an Israeli soldier in the week of violence in the occupied Arab territories.

Bassam Shaka of Nablus and Karim Khalaf of Ramallah--both crippled two years ago by car bombs that authorities contend were placed by Israeli settlers--were removed from office for "general agitation, nonrecognition of the Israeli civil administration and repeated attempts to disrupt public order," according to the Israeli Army command.

The order was issued by Army authorities after consultation with Prime Minister Menachem Begin, officials said. As it was issued, Israel beefed up its military strength in the West Bank, deploying elite paratroops and armored vehicles for the first time.

Today's dismissals were followed by an increase in the violence that has swept the West Bank and Gaza Strip for a week, resulting in a total of six Palestinians killed by gunfire and scores of others injured in clashes with security forces, as well as injuries to Israeli troops.

An Israeli Army sergeant major was killed today--the first fatality reported among Israeli troops so far--and three soldiers were wounded when two hand grenades were thrown at their car in the Gaza Strip, Israeli authorities said. Three Arab passers-by were wounded in the blast.

The Palestine Liberation Organization initially claimed responsibility for the attack in Gaza but then reversed itself and said it had nothing to do with the incident.

In Washington, State Department spokesman Dean Fischer, addressing the issue for the fourth straight day, said for the first time that Washington is "profoundly concerned" by "the deterioration of the situation in the West Bank and Gaza, which has resulted in needless and tragic deaths" on both sides.

Fischer said that the United States "regrets" the removal of the elected officials. He said no more, despite heavy questioning by reporters, apparently reflecting a continuing U.S. assessment that the political situation in Israel is unusually tense and difficult.

Shaka and Khalaf, who were elected in 1976, were awakened by Israeli troops at their homes at 6:30 a.m., according to Khalaf, and taken to central command headquarters where the dismissal order was read to them. They were not allowed to return to their municipal offices, which were blocked by Israeli troops and armored vehicles.

The dismissals, along with that last week of the mayor and city council of El Bireh and the deportations in May 1980 of the mayors of Hebron and Halhoul, appeared to curtail severely the Palestinian nationalist leadership in the West Bank, which Israel has been seeking to replace with new leaders that it regards as moderate.

Shaka, Khalaf and the officials of El Bireh all had refused to meet with the head of the Israel's new civilian administration for West Bank, Menachem Milson.

Throughout the West Bank, Palestinians stoned Israeli vehicles and blocked roads, while a general strike continued to paralyze the occupied territories. About 20 Arab youths were arrested in clashes with police in East Jerusalem.

Other Arab mayors in the West Bank began meeting to consider mass resignations to protest today's dismissals and opposition parties in Israel's parliament condemned the move as provocative and unnecessary.

The Army, however, called both mayors "extreme and uncompromising" supporters of the Palestine Liberation Organization and charged they incited anti-Israeli disturbances through their membership in the National Guidance Committee, which Israel banned earlier this month.

The Israeli Defense Forces' spokesman, in an 11-page statement, accused Khalaf of having ties to the Palestine Liberation Front and maintaining contacts with PLO officials in Beirut. It accused Shaka of "working to make Nablus the center of nationalist acitivity" in the West Bank.

The document quoted numerous statements attributed to Khalaf in newspapers in Beirut and other Arab cities and in East Jerusalem Arabic newspapers.

It said Khalaf, "like other extremist mayors, was a signatory of mourning announcements that appeared in East Jerusalem newspapers whenever a PLO terrorist would be killed carrying out a terror operation."

It quoted Khalaf as telling an Israeli radio reporter in 1976, "You Jews are haters of humanity," and as telling an Austrian reporter in 1980, "The only solution is war. . . . In a number of years we shall be the victors and Israel shall no longer exist."

Shaka was quoted as telling a Saudi journal, "We represent the PLO on the conquered soil. Anyone who wishes to make contact with us must do so through the official channels in Beirut."

Both mayors denied belonging to illegal organizations and said their dismissals were a prelude to the removal of all Arab mayors in the West Bank and eventual annexation of the territory by Israel.

"I was elected, along with my colleagues in the National bloc, and I reject this arbitrary action by the occupation government which goes under the guise of a civil administration," Khalaf said. "It is another step toward annexing the West Bank and Gaza Strip."

His deputy mayor, the Rev. Adeh Rantizi, an Anglican priest, said, "This control by force and fear cannot continue. The people will not cooperate with any Israeli committees that try to run the government."

Shaka said that after his dismissal, he attempted to enter his city hall but was blocked by an Israeli soldier, who taunted him, saying, "You are half a human." Both Shaka's legs were blown off in a 1980 car bomb explosion. A simultaneous explosion blew off Khalaf's foot.

Shaka called the dismissals "a total contradiction to international law and human rights," and said, "I will remain loyal to my nationality and never be a tool in the hands of those engaged in this plot."

Shaka and Khalaf have long been considered the most militant--and most popular--mayors in the West Bank and the only Palestinian leaders whose influence extended far enough beyond their own cities to qualify them in the minds of many nationalist Arabs and wary Israeli officials as potential "nationwide" leaders of the territory's 1.2 million inhabitants.

Each acquired an aura of martrydom upon returning from medical treatment abroad following the car bombings. It was partly their influence over West Bank politics that prompted the military government last year to cancel scheduled West Bank local elections.

In November 1979 Shaka was jailed for allegedly making "inflammatory" statements in a private conversation with Brig. Gen. Eliezer Ben-Elizar, who was then military governor, and the government ordered him deported. But Israel's supreme court overturned the decision and Shaka returned to a triumphal welcome in Nablus.

Both Nablus and Ramallah were heavily patrolled by troops today and for the first time since the unrest began Friday, tracked armored personnel carriers with .30-caliber machine guns were used, in an apparent show of force to discourage further rioting. In an unusual move, the military command brought in red-bereted paratroopers to replace the regular Army soldiers and reservists who normally patrol the West Bank.

Sharpshooters were stationed on rooftops throughout the two cities and foot patrols were more visible than in previous days.

Other West Bank mayors condemned the dismissals but it was uncertain tonight whether they would resign in protest.

Bethlehem Mayor Elias Freij, a proponent of reciprocal recognition by Israel and the PLO, said he expected further dismissals of mayors and city councils. If Khalaf and Shaka "are guilty of anything, then they should have been tried before being dismissed," Freij said.

Israel's opposition Labor Party called the dismissals "yet another hasty action that characterizes government policy in the territories." It urged the government to halt the "extreme deterioration of the situation, which will hurt any chance of a dialogue" between Israelis and Palestinians.

Labor Party Secretary General Haim Bar-Lev, former army chief-of-staff, charged on Israeli radio that the government's policy is "based on force." He added, "What the mayors think and feel is their business. . . . As long as the government is interested in annexing the West Bank, it can expect such deterioration."

Ronnie Milo, head of the Herut faction of Begin's ruling Likud, called the Labor Party's reaction "shocking" and said Labor must assume responsibility if a world movement develops toward creation of a Palestinian West Bank state.

David Kimche, director general of Israel's Foreign Ministry, charged tonight that the PLO in Beirut decided three weeks ago to provoke violence in the West Bank and used the two West Bank mayors who were dismissed today to execute those orders.

"The PLO decided three weeks ago it had to reassert its hegemony," Kimche charged. "They decided if they could not be active on the Israeli-Lebanese border, they would have to be active in the West Bank." A July 1981 cease-fire agreement between Israel and Palestinian forces bars hostile cross-border activities.

Kimche's allegations were made in a telephone interview after a Foreign Ministry official suggested to reporters that Kimche had observations to make about the unrest in the West Bank.