The first tents to house Palestinian refugees whose homes were destroyed in the Israeli invasion last summer have finally been erected in the Ayn Hulwah camp here after four months of dispute among Israeli, Lebanese and U.N. officials.

No one seems happy about the tents, including the Palestinians, who are threatening to burn them down.

A demonstration tent was set on fire by children Oct. 26, and since then officials of the U.N. Relief and Works Agency and camp elders have negotiated to get the refugees to accept the idea of living in the temporary shelters. The first ones were set up yesterday.

"It seems we have general approval now, and the people will take the tents," said relief agency representative Denis Brown. "They are still upset because they are only tents, but they realize there isn't much else open to them."

But Brown, appearing none too sure of the firmness of the agreement, added: "You could read tomorrow they were all burned down."

There are 60,000 to 65,000 homeless Palestinians from five refugee camps in Israeli-occupied southern Lebanon, according to U.N. and American estimates. The biggest one is Ayn Hulwah, on the southern outskirts of Sidon.

Israel at first opposed erecting tents to tide the refugees over this winter because it fears the tents will lead to the reestablishment of the camps as potential "hothouses of terrorism."

The Lebanese government, after indicating in August it would approve tents but nothing more permanent, also is unhappy with the prospect of seeing the camps restored.

It still has not given its formal permission for the tents to go up, according to the U.N. officials, but it has made no official protest.

Workmen set up the first 25 tents today and laid more cement-tile floors and waist-high cinder-block walls that are to form the basic structure over which the tents are being stretched. About 40 such tent sites are scheduled to be built each day.

The refugees protested the austerity of the shelters. "There is no toilet, no kitchen, no windows, no water and no room," said Amina Issa, an elderly women who said she had 14 children and grandchildren to "worry about."

"These are for animals, not people . . . with the wind in the winter, they will blow away," she said.

The cement base of each site is about 9 by 11 feet, and each tent is intended to house six persons.

Brown said there was only enough space to house 7,000 to 9,000 refugees, compared with at least 25,000 in the camp previously.

He estimated that the camp had lost 30,000 to 50,000 square yards of ground space because officials had restricted it to the original area alloted to the refugee camp. The destruction of three-quarters of all houses, many of them two and three stories high, meant the loss of "air space," he said.

The mood in Ayn Hulwah was angry today. "We will burn them down," said one 12-year-old boy. "Not now, when the Israelis can see, but later tonight when they are out of the camp."