Kevin Loughery was fired last night as coach of the Washington Bullets and Wes Unseld, an assistant coach with the team and a star center during its 1977-78 National Basketball Association championship season, was named his replacement.

"It's very difficult to release people you're fond of," owner Abe Pollin said. "Kevin is an old friend and this was tough to do, but I feel it's best for the team and the organization.

"I don't know why they {the players} didn't respond to Kevin, but they didn't. I didn't think Kevin was able to get through to them -- as hard as he tried. And I don't know why. But I did know we had to do something."

Unseld becomes the Bullets' 11th head coach. Loughery had been coach since March 1986, when he replaced Gene Shue. He finished 42-40 a year ago; this season's team is 8-19. {Related story, Page C1.}

After trailing by 33 points early in the third quarter Saturday night, the Bullets were beaten, 111-100, by the Houston Rockets. It was the team's fifth straight defeat. The last three games, losses by an average of more than 10 points, were at Capital Centre.

According to Pollin, those losses played a big part in his decision. The owner had spent the previous week on vacation, and when he returned to Capital Centre for Saturday night's game, he saw how the team's season had deteriorated. A number of fans wore paper bags over their heads, and a steady chorus of boos was directed at the team. After the contest, the players and Loughery heard angry chants and calls from the fans.

"I wasn't surprised, I guess I knew something could happen," said guard Frank Johnson. "I knew that this was a big week for us; we had three games at home. Losing all three of them was tough and the way we lost them, not really being close in them, was tough, too.

"The coach wasn't out on the floor at the time so you can't put it all on him. We have to take some responsibility for the way we've played."

One week ago today, Loughery said games against Portland, Denver and Houston were perhaps the "three key games of the season" for the Bullets. Some observers thought he was putting his job on the line with the statement, but he disagreed.

"I didn't consider it putting myself on the line," he said. "I thought it was important to try and stress to the team how important it was to win at home . . . obviously, it didn't work."

The Bullets are 5-9 at home this season. Earlier, the team endured another five-game losing streak, as well as a four-game streak.

Loughery, 47 and in his 13th season as an NBA coach, took his firing philosophically.

"It really goes with the territory," he said. "Mr. Pollin just felt the team wasn't doing well, specifically at home. I would like to say that Wes is going to do a good job, but some players are going to have to exude some leadership."

A member of the Bullets' organization said one of the team's problems, not related to Louighery, was that players had lost respect for each other. "They may like each other, they may even be friends but I don't think they respect each other," the source said.

One of Loughery's last moves was starting guard Steve Colter in the third quarter of Friday's 124-109 loss to the Denver Nuggets. Colter originally was signed by the Bullets Dec. 22 to replace injured guard Darrell Walker. After Colter played 33 minutes in a 102-97 loss to Milwaukee four days later, Loughery said he was considering starting him in last Wednesday's game against Portland.

However, Colter was placed on waivers Tuesday in a move that the player said had been arranged before he signed. It was speculated that his release after being highly touted by Loughery was evidence of friction between the coach and General Manager Bob Ferry. Pollin, however, said the incident wasn't a factor in his decision to release Loughery.

Unseld, 41, has been a Bullets vice president since his 1981 retirement. A five-time NBA all-star during his 13-season career, Unseld still holds a number of franchise records, including games and minutes played, rebounds and assists.

Before the start of this season, Unseld agreed to leave the front office to become an assistant to Loughery. There was speculation that he took the job as a favor to Pollin, with whom he shares a close relationship. It was in that same vein, Unseld said, that he took his new position.

"It's not the way I wanted it to happen, but we met and he asked me if I would do it, it never occurred to me to say no to him," Unseld said.

When asked if he felt ready to assume a head coaching position after just 27 games on the bench, he replied, "I don't know if anyone is ever ready. It's not an ideal situation. Kevin is a good friend and a guy that I like and respect."