ALGIERS, NOV. 15 (TUESDAY) -- The Palestine National Council early today proclaimed an independent Palestinian state in the Israeli-occupied West Bank and Gaza Strip and for the first time implicitly recognized the state of Israel.

PLO Chairman Yasser Arafat, wearing his customary combat fatigues and black-and-white checkered headdress, pronounced the declaration of independence to the jubilant council members saying: "In the name of God, in the name of the Palestinian people, and in the name of the Arab people, the Palestine National Council announces the existence of the Palestinian state. Palestine is for the Palestinians everywhere."

The proclamation was greeted by wild applause from members of the 315-man council who earlier had chanted rhythmically as they waited for Arafat to appear: "Unity, unity until victory. Revolution, revolution until victory."

Later, Arafat described the council's actions as establishing "a Palestinian state on Palestinian land with holy Jerusalem as its capital" and said the new state would be committed to "peaceful coexistence with all people for a durable and lasting peace."

The proclamation, which will have no immediate practical effect in the troubled region, came shortly after the council, a quasi-legislature in exile of the PLO, voted overwhelmingly to accept United Nations Security Council Resolution 242, long the cornerstone of international efforts to secure a lasting peace in the Middle East.

The resolution, formulated in 1967 following the Six-Day War, established the principle that all states in the region -- including Israel -- are entitled to live in peace "within secure and recognized boundaries." It also calls for an international conference to negotiate a settlement of longstanding territorial disputes between Israel and its Arab neighbors.

The vote in favor of the resolution was seen as a victory for Arafat and moderates within the PLO leadership seeking to position the organization for direct involvement in any new peace talks on the Middle East and to take political advantage of the 11-month-old Palestinian uprising against Israeli rule in the occupied territories.

Final approval, on a ballot of 253 to 46 with 10 abstentions, followed a vigorous effort by hard-line opponents of acceptance -- led by Marxist guerrilla chiefs George Habash and Nayef Hawatmeh -- failed to block it in the council's political committee.

Habash said before the vote, however, that he would not continue to oppose a majority decision or seek to cause a split in the council. "We stress that we are united despite such differences," Habash told United Press International.

The policy statement adopted by the council calls for "the convening of an effective international conference under the auspices of the United Nations with the participation of all parties involved in the conflict, including the PLO, on an equal footing on the basis of {U.N.} Resolutions 242 and 338 and guaranteeing the legitimate national rights of the Palestinian people, above all, rights to self-determination." U.N. Resolution 338 reaffirmed the main principles of Resolution 242 following the 1973 Arab-Israeli war.

{In Washington, President Reagan said he saw "some progress" in the Algiers council meeting. The United States has consistently demanded an explicit PLO recognition of Israel and renunciation of terrorism as a condition for direct talks with the organization.

{A State Department spokesman said it would be difficult "to make a judgment without seeing the full document. When we have a clear view, we'll make a judgment. Until that time, we can't say."}

The council also approved a declaration on terrorism that states: "The Palestine National Council rejects terrorism of every kind, including state terrorism, and confirms U.N. Resolutions 27-159 and 40-61 and the Cairo agreement of 1985," all of which deal with terrorist activities and protection of uninvolved civilians.

In addition, the council called on Israel to return territories captured in the 1967 war -- a further specification of Resolution 242 -- to return East Jerusalem to the Palestinian state, and for the West Bank and Gaza Strip to be placed under U.N. supervision for a limited period "to achieve security and peace for all."

{In Israel, the Foreign Ministry said that it, too, would have to study the complete text of the statement before making a full response. But a spokesman said that first reports from Algiers did not appear to indicate a step forward. "You have here a new element of {the council} mentioning 242," the spokesman said, adding that the council apparently had not unconditionally recognized Resolution 242 as Israel has long demanded, but had linked its acceptance to Palestinian independence.}

On Sunday, Israeli Prime Minister Yitzhak Shamir denounced the expected Palestinian declaration as "a fiction," saying that Israel "will reject any attempts to create a new situation in the region."

Bassam Abu Sherif, an Arafat aide who earlier this year wrote a manifesto for "peace and security" for Palestinians and Israelis, called the assembly's actions "a very big success for the Palestinian people and Chairman Arafat."

Sherif renewed the PLO appeal to President-elect George Bush to "consider a new policy for dealing fairly with the two main parties" to Middle East conflict and expressed the hope that "very soon we will have a U.S.-Palestinian dialogue that will lead to an international peace conference."

Edward Said, a Columbia University professor here to help draft and translate council documents, said the declaration of independence and the uprising in the West Bank and Gaza constitute "two important advances" in his lifetime. And for the Palestinian youths in the territories awaiting today's announcements as they battle Israeli troops, Said said: "For a while, there will be euphoria," but then "there may be repression."