The Israeli Cabinet voted 16 to 1 tonight to accept the report of the inquiry commission into the Beirut massacre, but Defense Minister Ariel Sharon refused to say whether he would abide by the commission's recommendation that he leave office.

The vote came in an atmosphere of extreme tension, heightened by a hand grenade explosion outside Prime Minister Menachem Begin's office--where the Cabinet met tonight--killing one person and wounding nine others a short time before the vote on the commission's findings.

The explosion caused chaos outside Begin's office. An unusually heavy contingent of police and soldiers, stationed there to prevent clashes between pro- and anti-Sharon demonstrators, scrambled to cordon off the area for fear of additional bombs as several ambulances arrived to evacuate the wounded.

Only Sharon voted against adoption of the report, which declared that Israel bears clear "indirect responsibility" for the massacre last September of hundreds of Palestinian refugees by its ally, the Lebanese Christian Phalangist militia units.

The commission's report, which has exposed the deep divisions in Israeli society, called for Sharon's resignation or his dismissal by Begin.

Early Friday Israeli radio said that Sharon had told Begin that he was resigning as defense minister as of Monday, but there was no official confirmation of the report.

The prime minister, who as recently as yesterday said he would not fire Sharon, refused to discuss his intentions following the 16-to-1 vote. Begin voted with the majority.

A senior official who is close to Begin said that if Sharon refuses to resign, in defiance of the Cabinet vote, the issue "will have to be resolved. It cannot be prolonged."

The official said this could still be "a matter of days."

What happens after today is unclear. The next scheduled Cabinet meeting is Sunday.

The explosion of the hand grenade, which was planted beneath a van owned by a leader of Israel's Peace Now movement about 100 yards from the entrance to Begin's office, climaxed a day of tension and sporadic violence that descended on the country in the aftermath of the commission report and the mounting pressure for Sharon's ouster.

There was no immediate announcement of arrests in connection with the bombing.

The person who was killed by the grenade was identified by the Peace Now group as Emil Grinzweig, 35, a reserve Army officer who served in Lebanon. The wounded included two police officers and the son of Israeli Interior Minister Yosef Burg.

With a handful of his supporters chanting their loyalty to him outside of Begin's office, Sharon emerged from the meeting, read a brief statement denouncing the grenade explosion and--smiling broadly--entered his car.

Under Israeli law, only Begin has authority to dismiss Sharon or any other minister. While the comments of his senior aide indicated Sharon's days as defense minister are numbered, Begin kept his intentions unknown.

Leaving the meeting, the prime minister, his eyes downcast, said the explosion outside his office was "a frightening and shocking tragedy."

"Of course we don't know who committed this crime," he said. "I call on the people to cool this atmosphere. There is a heavy debate among the people, but we must not, heaven forbid, take the path of violence. We must all act in the name of love of Israel."

Officials said that Begin, who has said nothing publicly about the findings of the commission, argued strongly for adoption of the report. They said Sharon proposed, but the Cabinet rejected, additional study of the report before deciding on its recommendations.

The overwhelming Cabinet vote was the first definitive action taken by the Israeli government since the inquiry board reported its findings on Tuesday, plunging the government and, increasingly, the country into turmoil. But the silence tonight from Begin and Sharon meant there was no clear-cut decision on Sharon's future, risking further clashes such as occurred earlier today between the defense minister's equally passionate supporters and enemies.

It remained unknown whether Sharon would seek to rally his supporters further to his defense. Following tonight's meeting, Energy Minister Yitzhak Modai said Sharon "is out" of the government one way or another.

"I told him the future of his political life will depend on how he accepts the Cabinet's decision," Modai said.

The ugliness of the atmosphere that has descended on Israel in the wake of the commission's report was evident on the streets of Jerusalem today and at the emergency entrance to a hospital where some of the wounded anti-Sharon demonstrators were taken following the explosion.

"It's a pity they didn't blow them all up," a man at the hospital entrance was heard to say by a correspondent for the Reuter news agency.

About a thousand of the Peace Now demonstrators started their march on Begin's office this afternoon from the center of Jerusalem. Fistfights and scuffles between the marchers and government supporters erupted in some of the neighborhoods the demonstrators passed through.

There was a strong racial overtone to the clashes between the mainly Oriental Jewish supporters of the government and the Peace Now group, which is dominated by Israeli intellectuals and kibbutz members of European origin.

The marchers were taunted with personal insults and cries that they were supporters of the Palestine Liberation Organization. "It's too bad Hitler didn't finish you all off," one man was heard to shout, according to a witness.

"It was very unpleasant and frightening," said Rebecca Heimann, one of the marchers. "You should have seen their faces. They looked like supporters of Iran's Ayatollah Ruhollah Khomeini. It's a shame to call them brothers."

The Cabinet meeting, which lasted more than five hours, began at 5 p.m. while several hundred progovernment supporters stood outside Begin's office chanting that Sharon is "King of Israel" and "Arik Sharon's nickname , don't."

Apparently by prearrangement with the police, most of the progovernment group left one side of the area near Begin's office at 7:20 p.m. About 10 minutes later, the Peace Now marchers, many holding lighted torches, began arriving on the other side of the area, gathering in a small park that overlooks Begin's office and the Bank of Israel building across from it.

The demonstration had ended and the bulk of the Peace Now group had left the area when at 8:47 the grenade exploded, setting off pandemonium.

Eyewitnesses said the grenade apparently had been placed beneath a van belonging Galia Golan, a specialist in Soviet studies at Hebrew University and a well-known Peace Now activist, that was parked in a driveway near the entrance to the Bank of Israel building.

As dozens of reporters and cameramen who were gathered outside of Begin's office awaiting the Cabinet decision raced to the scene of the explosion, police and soldiers fought to clear the area.

People near the site of the explosion said there was no sign that the grenade was thrown, and there was no immediate indication of who was responsible for it.

A man who identified himself as a supporter of Begin and Sharon said his group had not planted the grenade. "Nobody put anything there," he said. "This is a provocation."

Peace Now issued a statement tonight charging that the explosion resulted from "the atmosphere of encitement and terror against political opposition" that it said was fostered by the Begin government.

"The movement was instrumental in forcing the government to set up the inquiry commission into the Beruit massacre ," the statement said. "It will continue to press for full implementation of the commission's recommendations. We will not tolerate any arrangement which will permit Mr. Sharon to continue to serve in any capacity in the Cabinet."

The shock of the explosion was written on the faces of Cabinet ministers as they left the meeting. Interior Minister Burg, who left early after being informed of what was described as his son's relatively light injury, told reporters, "Let us not forget who we are and how many deaths have occurred in this generation."

Burg said the blast should spur the government to end the political stalemate over the commission's recommendations and Sharon's future or risk further social and political hamsin--a Hebrew word that refers to the hot, dry desert winds that occasionally blow over Jerusalem, causing discomfort and increased tension among many.

A short time later, the Cabinet voted to adopt the commission's recommendations, but the silence of Sharon and Begin as to their intentions meant there would be hours if not days more before there was a decisive end to the drama surrounding the defense minister's future in the Israeli government.

Begin still appeared anxious for Sharon to leave on his own, although the comments of the official who briefed reporters following the Cabinet meeting strongly suggested that he might overcome his reluctance to dismiss him if there was no break soon in the deadlock.

"Legally, this doesn't mean a firing," the official said. "Legally, Sharon is still the defense minister, but I suppose in a short time, a matter of days, this will be resolved."

The Cabinet voted to adopt the full commission report, which includes recommendations that Maj. Gen. Yehoshua Saguy be removed as chief of military intelligence, and that Brig. Gen. Amos Yaron, who was commander of all Israeli forces in Beirut at the time of the massacre, be demoted from field command. The two officers spoke to the Cabinet before the vote.