GAZA, DEC. 18 -- Palestinian youths streaming out of mosques here after Friday prayers clashed with Israeli soldiers who opened fire with live ammunition, killing two and wounding 20, according to hospital officials and Palestinian witnesses. Another youth was shot in the back, witnesses said, as he fled from soldiers in front of Shifa Hospital after a rock-throwing incident.

"We are in a battle here," said a doctor at the hospital, where Israeli soldiers stormed the medical compound, scuffling with nurses and doctors who tried to prevent them from taking wounded youths away for questioning.

Reporters who reached the hospital shortly after violence broke out there found doctors and nurses highly agitated and complaining that an Israeli officer had kicked and beaten hospital staffers trying to attend to wounded youths wanted for questioning.

"There is no hospital director," a medical technician shouted to two western reporters. "He has been beaten."

A nurse, her smashed fingers bandaged and her body bruised, said she had been hit with a rifle butt and kicked on her legs and ribs as she fought to keep a gunshot victim from Israeli soldiers. "He may die," she said she protested.

"Let him die, Palestine is lost," she said an Israeli soldier replied.

Street barricades and burning tires reappeared in Gaza today as angry Palestinian youths across the 28-mile-long strip of squalid camps and shantytowns resumed their uprising against Israeli occupation troops.

In Jerusalem, riot police fired tear gas to disperse about 300 Arab demonstrators who pelted them with stones after noontime prayers at Al Aqsa Mosque, one of Islam's most sacred sites, where the prophet Mohammed is believed to have ascended to heaven in the 7th century.

The violence that erupted 10 days ago, following a traffic accident in which four Palestinian youths died, is widely considered the worst outbreak of unrest since Israel occupied the Gaza Strip and the West Bank in the 1967 Arab-Israeli war. At least 16 Palestinians have died and more than 200 have been wounded or beaten, according to United Nations officials who work at Palestinian refugee camps in the Occupied Territories.

After a quiet day yesterday, a number of Israeli and Palestinian officials predicted the violent rebellion that has gripped this densely populated enclave, where more than 650,000 Arabs live within 100 square miles, would subside.

But reporters touring three of the refugee camps and Gaza's city center saw hundreds of youths manning barricades and brandishing rocks and molotov cocktails as they dodged through alleys, courtyards and streets in a running confrontation with Israeli forces.

Black smoke from burning tires rose intermittently over the area on an otherwise balmy winter day in which vegetable stands and butcher shops stayed open for the Moslem holy day business.

It had been a quiet morning under a crystal blue sky broken only by the occasional drone of Israeli reconnaissance aircraft patrolling the Gaza skies.

Large crowds gathered in Gaza's mosques for noontime readings from the Koran. When they filed out into the streets shortly after 1 p.m., spontaneous demonstrations broke out in the Shijaiyah neighborhood of Gaza City and in the El Bureij refugee camp.

Israeli garrison forces, who had appeared to relax their tight control over Gazan crowds yesterday, pressed forward today to confront the demonstrators, according to Palestinian witnesses.

Outside Shijaiyah's mosque, in one of the poorest sections of Gaza City, demonstrators were indistinguishable from the faithful returning from the mosque to their homes.

Witnesses said that 20-year-old Maysaraya Batnigi was not participating in the Shijaiyah demonstration when he was fatally wounded by a rifle shot to the head. Late today, the street in front of the mosque was strewn with rocks and masonry rubble from smashed storefronts.

The streets were charred from protest fires and stern-faced Palestinians gathered in groups of 20 or more to glare at dozens of Israeli soldiers and officers who set up a heavily armed garrison at the intersection adjacent to the mosque throughout the afternoon.

"He didn't throw rocks, he didn't do anything," said a relative attending Batnigi's funeral late this afternoon. "He came out from the mosque and they shot him."

Mohammed Ali Hassan, 27, and Assad Hellis, 15, interviewed in the recovery ward of Shifa Hospital, also said they were shot as they were coming out of the mosque in Shijaiyah. Hassan was hit in the groin and Hellis in the left knee.

Mansour Dolah, 14, was at El Bureij refugee camp when he was shot in the right leg during what he described as a "big demonstration" after prayers at the camp's mosque.

A man identified as 29-year-old Abdulsalem Iftiha died from a bullet wound through his heart at El Bureij.

There were conflicting accounts of the death toll today. Israeli military authorities in Jerusalem said initially that three Palestinians were killed, two of them in front of the Shijaiyah mosque. But Palestinian medical authorities and residents of the Shijaiyah neighborhood attending funeral services for Batnigi said they did not know of a second fatality during the shooting incident.

The rush of gunshot victims to Shifa Hospital in the early afternoon set up the second confrontation of the day as 60 to 80 Palestinian youths gathered behind a wall of the hospital compound and hurled rocks and molotov cocktails at Israeli soldiers stationed across the street and behind another courtyard wall.

Just after 2 p.m., the Israelis lobbed tear gas toward the youths, who then fled into the street in front of the hospital. When Israeli soldiers charged, the youths turned and ran down the street past the hospital.

"That's when the firing started. I heard about 30 shots," said a western aid worker who watched from a rooftop 150 feet away.

"One kid wearing a black-and-white kaffiyeh {head scarf} fell on the pavement under the tree in front of the hospital," the aid worker said. "He was the last one running and he was hit in the back," said another aid worker watching from the same vantage point.

"At the time the shots were fired, the kids were running away, I'm certain of that," one of the aid workers said.

Inside the hospital, a distraught man accompanied by his mother said they had come to Shifa to find his younger brother, who had been shot in the leg during the 2 p.m. clash. "We came here to find him and he had been taken away in spite of his injury," he said. "What if he dies?"

Seventeen of the 20 Palestinians who were admitted to Shifa Hospital today were suffering from gunshot wounds, according to a hospital official. The official said seven Palestinians were beaten inside the hospital grounds when soldiers entered the facility to take patients away for questioning.

One of those beaten was a man who said he was leaving the hospital after delivering a patient who had been in a car accident. The man, one of 60,000 Gazans who commute to work in Israel every day, was badly bruised. "I'm not going to work for them anymore," he said from his hospital bed.