Israel released 1,150 Arab prisoners at widely separated locations today in an elaborate prisoner exchange that also brought freedom to three Israeli soldiers who were captured during the 1982 invasion of Lebanon.

The main exchange took place here, where 394 Arab prisoners were flown this morning from Tel Aviv, and the three Israelis were flown in separate planes from Damascus. Under the supervision of the International Committee of the Red Cross, the Arabs then boarded other aircraft that took them to Libya while the Israeli soldiers, one by one, were released for a flight home.

"The exchange is completed, everybody is aboard his own plane," Red Cross spokesman Alain Modoux told reporters here shortly after midnight, after more than 12 hours of negotiations, delays and confusions.

At the same time, 150 Arabs were released to Syria at Kuneitra, on the Golan Heights, and 606 were released in the West Bank and Gaza Strip.

The exchange was the third between Israel and the Arabs since the 1982 invasion of Lebanon and it left only four Israeli soldiers unaccounted for in the war while virtually emptying Israeli jails of prisoners whose freedom was sought by Arab countries, including several convicted of spectacular acts of terrorism.

The exchange provoked immediate criticism from right-wing politicians and spokesmen for the Jewish settlers in the West Bank, Washington Post correspondent Edward Walsh reported from Jerusalem.

In a statement released by his office tonight, Prime Minister Shimon Peres defended the exchange. "The price is unbearable," he said, but so was "the indescribable suffering of the soldiers' families."

West Bank Jewish settlers held a rally in Hebron tonight to protest the release of prisoners convicted of crimes against Jews.

"No country in the world would exchange soldiers for murderers and even allow them to return to their homes," Shlomo Vach, secretary of the council at Kiryat Arba, a larger Jewish settlement adjacent to Hebron, told reporters at the rally.

Uzi Landau, a member of parliament from the right-wing Likud bloc, said, "This is going to be an enormous incentive for future terrorist activity. We don't know the price we will have to pay in suffering, in killed people."

Despite this initial criticism, the exchange did not appear likely to cause a rupture in Israel's national unity government between the Labor Party headed by Peres and the Likud bloc, Walsh reported. The terms of the exchange were approved, reportedly unanimously, about two weeks ago by a so-called "inner cabinet" of 10 senior ministers split evenly between Labor and Likud.

Israeli officials said the Arab prisoners who were released today fell into three categories. These included 121, many of them members of the hard-line Popular Front for the Liberation of Palestine-General Command captured during the war, who had been held in Israel's southern Lebanon prison camp at Ansar and were flown to Geneva.

There also were 150 prisoners described as mostly Lebanese who recently were transferred to Israel after the closing of the Ansar camp.

The largest category was 879 prisoners freed from Israeli prisons, most of them Palestinians from the West Bank and Gaza Strip.

It was this last category that provoked the sharpest immediate criticism in Israel. They included:

* Kozo Okamoto, the only surviving member of a three-man terrorist gang from the Japanese Red Army that killed 26 persons in a 1972 attack at Tel Aviv airport. Okamoto was flown to Geneva this morning.

* The only two surviving members of a terrorist squad from the main Fatah wing of the Palestine Liberation Organization that in 1978 killed 33 civilians and wounded 71 in an assault on a bus north of Tel Aviv. They also were flown to Geneva.

* Ziad Abu Eain, who was convicted in 1982 of placing a bomb that killed two Jewish youths in Tiberias. Abu Eain, who denied involvement in the case, was extradited from the United States to Israel in a move that stirred strong criticism from Arab-American groups and Arab governments. Abu Eain returned to his family home in Ramallah tonight and was greeted by a small crowd of well-wishers.

The three freed Israeli soldiers were identified as Sgt. Hezi Shai, a tank crewman captured the week of the invasion, and Pvts. Yossef Groff and Nissim Salem, captured on Sept. 4, 1982.

Their release leaves four Israeli soldiers unaccounted for from the war in Lebanon and officials here vowed that they would make every effort to locate them and gain their freedom.

Sgt. Samir Assad, an Israeli Druze, reportedly was held by the Democratic Front for the Liberation of Palestine, although that organization earlier said he was killed in an Israeli naval attack off Tripoli, Lebanon, last year.

The other three -- Zvi Feldman, Zachary Baumel and Yehuda Katz, a tank crew captured during the first week of the war -- are thought to be in the hands of the Syrians or a Palestinian group in Syria. Sources in Jerusalem said efforts to locate them and gain their release as part of today's exchange were unsuccessful.

The parents of Baumel, who was born in Brooklyn and holds dual U.S. and Israeli citizenship, were in Washington Monday to meet with Israeli Embassy and U.S. Congressional officials in an effort to gain their son's release.

Yonah Baumel, the missing soldier's father, said the family was "trying to appeal to the Syrians, on a humanitarian basis, since we understand the boys are being held on Syrian territory." He said he had received information recently that his son was "in the hands of a small extremist group -- we don't know which one."

The transfer process here lasted more than 12 hours, with a mixture of bureaucratic delay and confusion.

The three planes bearing the Palestinian and Lebanese prisoners were different than what had been specified by the Red Cross in the original agreement and they were carrying up to 36 passengers described by the Red Cross as "accompanying persons." Their presence meant that all three planes were overloaded and they were not allowed to take off.

After several hours of negotiation, Swiss aviation authorities agreed to allow takeoff in return for a Libyan agreement to take full responsibility.

The delays came from the necessity of coordinating every move made in Geneva with the moves being made in freeing prisoners in the occupied Israeli territories.

Observers attributed much of the delay to caution on the part of Red Cross to prevent a repeat of an incident in a previous exchange in which Israel pulled one prisoner -- Abu Eain -- off the bus at the last minute and returned him to prison, a move that brought a rare and strong criticism from the Red Cross.

The three Israeli planes had landed on schedule at 11 a.m.; the three planes from Syria did not land until almost 3 p.m. after what Red Cross officials described as a "technical stopover" in Vienna.

The Israelis kept their prisoners handcuffed until word was received from Jerusalem that the transfer was under way, Red Cross official Modoux, who went aboard the planes, said.

"The Israelis were very much in command," he told reporters. "The prisoners sat there looking straight ahead, not moving and not saying a word."

Modoux said the exchange was negotiated through the mediation of former Austrian chancellor Bruno Kreisky, who visited Israel and Syria in recent weeks, and Herbert Amry, Austrian ambassador to Greece. The Red Cross, he said, "was only involved in the technical aspects of the handover."