GAZA, DEC. 16 -- -- According to one of the rumors circulating here, Palestinian youths wounded by Israeli soldiers in the current spate of violence have been taken to an Army hospital near Tel Aviv to be "finished off."

Another rumor, spread by mosque loudspeakers, has it that Israeli soldiers poisoned a water reservoir in the village of Khan Younis.

And many sources, Israeli as well as Palestinian, say it may have been a rumor that touched off the violence that has claimed 13 Arab lives in the occupied West Bank and Gaza Strip in the past eight days. According to that rumor, four Gazans who were killed in a Dec. 9 traffic accident were the victims of a deliberate Israeli act of revenge.

Today, an Israeli soldier was stabbed in Rafah, at the southern tip of the Gaza Strip, and at least three Palestinians were wounded by Army gunfire. Black smoke from burning tires and makeshift roadblocks hung over several refugee camps in the area, and there were numerous reports of stone-throwing by Palestinian youths.

But large Army reinforcements sent in overnight and the introduction of water cannon for the first time since the clashes began apparently proved effective in reducing the violence.

The water cannon was used against demonstrators in at least three places today, and U.N. and Palestinian sources reported widespread arrests by the Army.

The authorities also took action on the rumor front, meeting with Gazan leaders for the second time this week in an effort to quash false reports and enlist their help in restoring order.

Few here would argue seriously that rumors are the cause of the continuing clashes in the areas occupied by Israel since it seized them in the 1967 war. The unrest, particularly here in the Gaza Strip, is rooted in Palestinian poverty, overcrowding and political frustration.

But in the last eight days, Gaza and the West Bank have become a case study in the way rumors flash through communities with no reliable machinery for public information, and in how those rumors fan any spark of confrontation between rulers and their unwilling subjects.

"There's definitely a 'bush telegraph' that's very active, and not always accurate," said William Lee, public information officer for the Gaza-West Bank office of the U.N. Relief and Works Agency for Palestinian refugees.

"The reason this is so prevalent, and not just in times of trouble, is the tremendous feeling of insecurity that these people have," Lee said. "You tend to take any information that comes to you and interpret it as befits your situation."

"It has its effects," Zohair Reyyes, a Palestinian lawyer and journalist from Gaza, told an interviewer, referring to the rumor mill. "People are so worried and jumpy that rumor just pulls the trigger. It means people are ready to accept exaggerated information." Reyyes cited a clash yesterday in Beit Hanoun, where a youth was shot dead, 12 people were wounded and, according to a U.N. spokesman, a 17-year-old girl died under mysterious circumstances. However, Reyyes said, rumor put the number of casualties at 200 or more.

Many of the rumors have at least some connection to fact.

U.N. officials branded as totally false the rumor that wounded Palestinians have been mistreated in Israeli hospitals. Usually only the most serious cases are taken out of the Gaza Strip for treatment, Lee said, and in some cases this has probably saved lives.

But two wounded Palestinians have died of their injuries, and other officials say rumors that they were taken to Israel to be "finished off" stem from a natural fear of the country whose soldiers have wounded them. Also, Israeli troops have gone into Gaza hospitals and arrested wounded Palestinians on charges of fomenting unrest.

The rumor about water supplies being poisoned apparently stemmed from an incident in which Israeli troops were reported to be urinating into a reservoir. A U.N. official said the water was subsequently tested and "it was not contaminated."

In some cases, Israeli security sources say, false rumors are spread by nationalistic Palestinians to foment trouble. More often, however, they appear to be a natural outgrowth of the situation in which the Palestinians find themselves.

They have lived for at least 40 years without a free press and thus put little faith in what they read, said Yehuda Litani, the Arabic-speaking Middle East editor for the Jerusalem Post and long-time reporter on life in the occupied territories. Although Israel permits several Arabic-language newspapers to publish, they are strictly censored.

"Rumors are the main means to transfer information in such a society," Litani said.