SALIM, FEB. 15 -- The Israeli Army today announced the arrest of two of its soldiers, one of them a master sergeant, for allegedly burying alive four young Palestinians with an Army bulldozer in this West Bank village 10 days ago. A military spokesman said more arrests were likely.

Witnesses said that after the bulldozer dumped a full load of earth on the four while they lay, as ordered, face down in a muddy road -- and a Jewish settler shouted, "Well done" to the soldiers -- the sergeant ordered the driver to run over them, but he refused.

The soldiers left about 15 minutes later and residents pulled the four men, unconscious, from under a 30-inch-high mound of dirt. All survived, according to residents, although two are still recovering from their injuries.

The incident in this village just outside the West Bank city of Nablus had been the source of conflicting rumors and unconfirmed reports ever since it happened Feb. 5, until the Army announced the arrests today.

"Even in my worst dreams I would never imagine such a thing," Maj. Gen. Amram Mitzna, military commander of the Israeli-occupied West Bank, told reporters this morning.

He said the Army investigation into the incident would have "the highest priority."

Mitzna, who announced the two arrests, added a note of self-reproach. "I warn the commanders all the time to expect the worst possible things when soldiers in certain places find themselves in control deciding about the lives of civilians," he said. "It's difficult to think of such a thing, but we should have thought."

Army officials said Mitzna acted quickly in arresting the alleged perpetrators in order to send a clear signal to his own men and to the public that such conduct would not be tolerated.

"We could have tried to hide this, but instead we chose to make it plain that this is wrong and the people who did this will go to jail," a military spokeswoman said.

But some critics contend that the burial incident is a logical result of a get-tough policy, including use of beatings, that Prime Minister Yitzhak Shamir has said was designed to reinstill "the fear of death" into a Palestinian population emboldened by the two-month-long wave of civil unrest in the West Bank and Gaza Strip.

The incident also raises questions about cooperation between the Israeli Army and Jewish settlers in the area.

One of those being questioned is Nissim Haba, a Jewish resident from the nearby settlement of Elon Moreh who the witnesses said helped beat the four men before they were buried and egged on the soldiers, shouting, "Well done" in Hebrew.

Haba's eight-year-old son Rami was battered to death in a cave outside the settlement last year in a murder that has never been solved but that settlers blame on Arabs.

Haba was not at his home this afternoon. His wife, Ruth, said her husband had hitched a ride on an Army jeep that day but denied any involvement in the burial incident. But, speaking in a living room whose walls are lined with photographs of her dead son, she declared grimly: "The Arabs killed my son. I wouldn't care if my husband buried them all."

Some Elon Moreh residents, however, said they were shocked by the incident and hoped that whoever is responsible would be punished.

There were scattered incidents of unrest in the occupied territories today, but the worst violence was in Arab East Jerusalem. Police cracked down in the Sur Bahir neighborhood after disturbances there, pulling youths out of houses, pummeling them and smashing furniture and car windows with their clubs, according to witnesses.

Nearly 40 people were arrested there and elsewhere in and around the city in what officials said was an effort to round up instigators of the recent violence.

Elon Moreh and Salim both are located a few miles east of Nablus, the Israeli settlement atop a plateau, the Palestinian village in the valley below.

But like many other remote villages in the West Bank, Salim has gradually been swept into the violence that has resulted in at least 54 Palestinian deaths. The incident here took place on a Friday afternoon after stone-throwing youths tried to block the road to Elon Moreh, according to a military spokeswoman.

She said the Army pushed them back to the village, where they built barricades and set them afire. The local military commander left the area after an Army bulldozer was brought in to block off the two main roads of the village with earthen mounds.

Meanwhile, witnesses said, soldiers accompanied by a settler whom the residents identified as Haba began entering houses and dragging out young men to clear away the roadblocks. They said several young men and family members were beaten with rifle butts and wooden clubs. Under military law, soldiers can order civilians to remove such barriers and, from many witness accounts in recent weeks, it appears to be common practice among soldiers to beat those who refuse.

When the debris was removed, the master sergeant, known here only as Charley, ordered four young men to lie face down and had soldiers walk on their legs and heads while clubbing them, witnesses said.

One of the victims, Assam Shtiyeh, 20, said a soldier picked up a large rock and pummeled his left leg with it. The leg still appears badly bruised 10 days later and Shtiyeh has been convalescing in bed in his parents' house here.

Shtiyeh's cousin said that after he and his three friends had finished clearing the burning tires with their bare hands and scraping away the debris of the makeshift barricade, they had hoped Master Sgt. Charley would let them go.

But according to three Palestinian witnesses, he ordered the four young men to lie face down in the mud along the main road at the entrance to their village and commanded the military bulldozer to bury them alive.

The four reportedly remained buried between 10 and 15 minutes before the soldiers left and residents pulled them from under the dirt and carried them home. Because the Army had put a curfew on the village, they stayed in their houses until the next day, when they were taken to a hospital in Jericho about 20 miles away. Nablus has a bigger government-run hospital, but it was also under curfew.

A local teacher who asked not to be identified said relations in the past between the Jewish settlers of Elon Moreh and Arab residents of Salim were correct but not warm. Now, he said, there is deep anger. "After we die, they can bury us, not before," he said.