Fighting between Israeli and Palestinian forces escalated sharply today, with the first significant shelling of mainly Christian East Beirut since the Israeli invasion coming amid a continuing deadlock in negotiations on a political settlement of the crisis.

In what appeared to be the heaviest and most sustained fighting Beirut has seen since the Israelis trapped Palestinian guerrillas in the western half of the capital last month, Israeli tanks and heavy artillery hammered Palestinian positions and residential neighborhoods in West Beirut and its southern suburbs.

Palestinian guerrillas and their Lebanese leftist allies fired back with artillery, mortars and rockets, hitting Israeli positions in the hills southeast of the capital and in the Christian quarters in its eastern half.

The shelling tapered off tonight more than 12 hours after it had begun following the announcement of a cease-fire on the state-run Beirut radio.

Israel, meanwhile, signaled once again its growing impatience with the failure to reach agreement on the evacuation of the Palestinian guerrillas bottled up in West Beirut and hinted strongly that it was considering measures to step up its military pressure to force a solution, Washington Post correspondent David B. Ottaway reported from Jerusalem.

Briefing reporters after the regular Sunday Cabinet meeting, a senior government official said the negotiations were "not moving . . . at the pace they should" and that Israel had "many alternatives" other than diplomacy to which it could resort to break the current impasse.

Casualty figures from today's shellings could not be reliably ascertained. The radio of the rightist Christian Phalangist militia, which controls East Beirut, reported 20 persons killed and 80 wounded all over the city. Israeli radio said 28 Israeli troops were wounded.

Washington Post correspondent Leon Dash reported from East Beirut that hospitals were filling up and blood supplies were dropping below a safe level.

Among the targets hit by Israeli shelling were the Palestinian refugee camps of Burj Barajneh, Sabra and Shatila in the southern suburbs of Beirut, the mainly Palestinian neighborhoods of Fakhani where some Palestine Liberation Organization offices are located, Lebanese working class districts in West Beirut and at least one hospital.

Shells and rockets fired by the Palestinians or their allies struck the Baabda presidential palace southeast of Beirut, a nearby Israeli bivouac and logistics base, a hospital in East Beirut and the Alexandre Hotel, where most of the foreign correspondents based on the Christian side are staying. One British diplomat at the hotel was wounded.

As night fell over the city, clouds of smoke could be seen rising from the area around the airport south of the city, the scene of the heaviest fighting. Soviet-made Katyusha rockets fired from mobile multiple rocket launchers could be seen streaking across the sky toward Israeli positions from points along the Mediterranean coast of West Beirut.

Beirut Radio reported that two Israeli tanks were knocked out in ground fighting as they tried to approach the airport and that eight vehicles were destroyed by Palestinian shell or rocket fire in Baabda. The Palestinian news agency Wafa said joint Palestinian and Lebanese forces destroyed 12 Israeli tanks and five ammunition trucks.

Bashir Gemayel, commander of the rightist Christian Phalangist militia, said his forces "will not be dragged into" the latest round of fighting, and blamed the Palestine Liberation Organization for "holding Beirut's civilian population hostage."

The fighting stymied efforts by Lebanese and American negotiators to conclude an agreement to avert a feared Israeli assault on Beirut and send the trapped Palestinian guerrillas in the capital out of Lebanon.

Lebanese Prime Minister Shafiq Wazzan accused Israel of trying to sabotage the negotiations and hinted that the talks might be called off if the United States failed to "bring firm pressure on Israel" to halt "this mad bombardment of Beirut."

The fighting prevented Wazzan from meeting with special U.S. Middle East envoy Philip C. Habib and delivering what a Beirut newspaper said was an 11-point document from PLO leader Yasser Arafat outlining the Palestinian position in the negotiations.

A senior PLO official said the 11 points were a summary of "basically the same" Palestinian positions already presented to Habib. The official said the points, which have also been conveyed to France, the United Nations and the Soviet Union, include a cease-fire, a disengagement of forces, a three-mile pullback by Israeli forces around Beirut, a withdrawal of Palestinian guerrillas into their camps, the introduction of an international force and Lebanese Army units to protect the camps and supervise the disengagement, negotiations between the Lebanese government and the PLO on the details of the Palestinian presence in Lebanon and the withdrawal overland to Syria of any Palestinian forces beyond the number that PLO and Lebanese negotiators agree may remain in Lebanon.

Another key figure in the negotiations, former prime minister Saeb Salam, has insisted that Palestinian leaders are much closer to agreement on a withdrawal of guerrillas from Lebanon than their public position indicates.

"The Palestinians are determined to go out; they want to go out," Salam said in an interview today. But, he added, Israeli Defense Minister Ariel Sharon "wants to raze Beirut to the ground with all the Palestinians and Lebanese in it."

He insisted, however, "I am not pessimistic. Despite all this I continue to work with Habib." He said that Habib telephoned him today and said he wanted a meeting to discuss "important matters," but that he advised Salam not to come to Baabda because of the shelling.

A top PLO official involved in the negotiations, Hani Hassan, told reporters that "we were preparing ourselves to go to Syria if the whole agreement was respected." He said this included Israeli withdrawal from around Beirut and from "all access roads," presumably meaning the route to Damascus.

The close adviser to Arafat also said it was up to Habib to "solve the problem" now that Syria has refused to receive Palestinian guerrillas encircled in Beirut. "He has to find ways, or he has to begin from the beginning," Hassan said. "If we could not find a place outside of Lebanon, he has to deal with how to stay in Lebanon."

Hassan said that there were Arab efforts to include his brother, Khaled Hassan, in an Arab League delegation scheduled to visit Washington Tuesday, but that the Americans so far had refused to allow him entry.

Syria, however, broadcast an appeal for the PLO to stand and fight in West Beirut.

Meanwhile, the Palestinian news agency today quoted Arafat as telling "the Arab masses" in a radio broadcast that Arab states had become "impotent" in the face of the Israeli invasion.

"It is the right of these masses to ask questions today and to punish those responsible tomorrow," Arafat said.

Correspondent Ottaway reported the following from Jerusalem:

Israeli military sources have been suggesting to reporters that a full-scale assault on West Beirut might not be necessary and that the PLO could be driven out by an intensive bombardment instead.

While Israel seems to be doing this in any case, a senior official insisted that the intensive Israeli shelling today was solely in response to fire initiated by the Palestinians.

Whatever the reasons for the stepped-up artillery dueling over the past few days, there are persistent signs here of increased Israeli frustration over the lack of progress in the complicated negotiations under way now for more than two weeks to get the PLO to leave Lebanon.

Habib has become the target of increasing criticism.

Prime Minister Menachem Begin's government is under international pressure and domestic constraints to avoid a ground assault on West Beirut.

Earlier, an Israeli official denied again that Israel was setting any deadline for the Palestinians to leave West Beirut. Habib had been reported to be pushing for an Aug. 1 departure.

In another development, Shamir was reported today to have told the visiting U.S. Agency for International Development administrator, Peter McPherson, that Israel as of next week would begin to allow the international Red Cross to visit the camps where captured Palestininan guerrillas are being held.

McPherson has just completed a tour of the devastated towns and cities of southern Lebanon to decide how best his agency can spend the $65 million it has obtained for relief and rehabilitation.