The apparent terrorist killings of seven Israelis in the past two months, including two whose bodies were found today, have ignited a vigorous debate in the Israeli government over calls for a major crackdown against Arab terrorists operating from the occupied West Bank.

The latest apparent victims of the recent rise in Arab terrorist attacks were two Jewish schoolteachers whose bodies were found near the northern Israeli town of Afula. The slain teachers, a 19-year-old woman and a 35-year-old father of five, were found bound hand to hand in a cave on the slopes of Mt. Gilboa, above the Jezril Valley, five days after they were apparently abducted while driving home from work.

The kidnap-slayings, ascribed by police to Palestinian terrorists, have fueled public demands for a return to the 1979-80 "iron fist" policy adopted in the occupied territories by the government of former prime minister Menachem Begin.

Signs of public panic and heightened anti-Arab fervor have already surfaced, with a large crowd appearing outside the Afula police station today shouting, "Death to the terrorists!" Two Palestinians were beaten at a bus stop as Jewish crowds went through the market looking for Arabs, resulting in the arrests of dozens of Jews for breach of peace.

Even before the bodies of the Afula teachers were found, security officials had begun issuing warnings to travelers and many Israelis living near the West Bank had begun driving at night only in convoys.

The Israeli Cabinet, at its next meeting on Monday, is scheduled to debate proposals to reimplement strict security measures that were used in the occupied territories when Palestinian nationalist ferment peaked five years ago. They include deportation of persons suspected of inciting terrorism and the use of administrative emergency detention, under which Arabs can be held for long periods without being charged with any crime.

The Cabinet will also consider employing the death penalty for terrorists convicted of murder, a close adviser to Prime Minister Shimon Peres said. Israel has a capital punishment statute, but it has not been used since Nazi war criminal Adolf Eichmann was hung in 1961.

"We are very worried. This is a a very dangerous phenomenon, and we have to find ways to cope with it," the senior official said. He said interim measures, including increased military patrols in the West Bank, more roadblocks and stepped-up use of civil guards for security duty, had already been ordered to counter the increase of terrorist killings.

The pattern in more than 12 terrorist killings in the past year has been strikingly similar: the abduction of Jewish couples, often in secluded areas close to the West Bank demarcation line, who later are found bound and slain.

The increase in such abduction-murders, security sources say, has been coupled with a rise in random bombings and street attacks by Arabs against Israelis inside Israel, but not by a corresponding increase in terrorist attacks against Jews in the West Bank and Gaza Strip.

A high-level meeting that included Peres, Vice Premier Yitzhak Shamir, Defense Minister Yitzhak Rabin, Police Minister Chaim Bar-Lev and Army Chief of Staff Maj. Gen. Moshe Levy was convened Wednesday to discuss the emergency proposals that will be put to the Cabinet on Monday.

Rabin was reported today to have told a closed joint session of the parliamentary finance and foreign affairs and defense committees that the Palestine Liberation Organization leadership now based in Jordan had ordered a stepped-up terrorism campaign in Israel and that fundamentalist Shiite Moslem militancy in Lebanon provided further inspiration to Palestinian nationalists in the West Bank.

Earlier, Rabin said in a state radio interview that the three-year occupation of Lebanon had diluted Israel's security infrastructure in the West Bank and Gaza Strip and had indirectly contributed to increased terrorism in Israel.

"There is no doubt that the presence of the [PLO] terrorist elements in Jordan facilitates their contacts with the residents of [the West Bank] and Gaza Strip, and there is no doubt that this has an influence . . . . There is no doubt that today they have the opportunity for personal contact, and in a scope they didn't have when they were in Beirut or Damascus," Rabin said.

When asked whether PLO directives from Jordan were made with the knowledge of King Hussein, Rabin replied, "I am certain that it is not. [the case] But the fact is that they are there, and we know for a fact tharational orders are sent from there and not from Tunis -- or less from Tunis -- to all the terrorist elements in the region." Tunis was where the PLO leadership was based after leaving Lebanon in 1982.

Other Israeli officials said that the tandem use of diplomacy and attacks on civilian targets was a familiar tactic of the PLO and that they were not surprised by the increase of terrorism at the same time a new Middle East peace initiative originating in Jordan is under way.

Apart from the use of the death penalty for convicted terrorists, which was demanded today by rightist members of parliament, the most controversial antiterrorist measure to be considered by the Cabinet Monday will be deportation.

Israeli military courts deported more than 1,500 Palestinian nationalist leaders from 1967 to 1980, but suspended the practice in 1980 after the controversial deportation of two prominent West Bank mayors, Fahd Kawasmi of Hebron and Mohammed Milhem of Halhoul.

Ruling on an appeal by the two mayors, the Israeli Supreme Court recommended that they be allowed to return from Jordan but rejected their claim that deportation violated Article 49 of the Fourth Geneva Convention, which prohibits the deportation of persons from an occupied territory.