Former Chilean president Augusto Pinochet, South America's most notorious former dictator, was arrested in a London hospital late Friday after Spain issued a request for his extradition on charges of atrocities committed against Spanish citizens in Chile.

The Chilean government is protesting the arrest, saying that Pinochet, who is now a senator for life, has diplomatic immunity and should be freed immediately. Scotland Yard would not confirm his whereabouts today, but sources indicated he is being held at the London clinic where he was recovering from an Oct. 9 herniated disc operation. He apparently was arrested after a surprise raid by police, marking the first time Pinochet has been detained for actions committed during his 17-year rule from 1973 to 1990.

No hearing date was set, but the battle is likely to escalate into a major test of international law as Chile, Britain and Spain are poised to set precedents on the prosecutions of human rights cases worldwide.

Pinochet, who led the 1973 military coup against the democratically elected Socialist President Salvador Allende, is the most visible living figure from South America's era of strongmen. His right-wing supporters in Chile have portrayed him as the hero of his nation who should be honored instead of put on trial. But many Chileans revile the retired general, who turns 83 next week. More than 3,000 leftists were killed or disappeared during the early years of Pinochet's rule.

Since 1996, Spanish judges Manuel Garcia Castellon and Baltasar Garzon have been investigating charges of genocide, terrorism, torture and murder committed in Chile and Argentina during the military dictatorships of the 1970s and 1980s. They requested Pinochet's extradition from Britain this week to question him about seven Spaniards and their descendants who died under his rule.

Although it is uncertain whether he will ever face trial in Spain if British authorities agree to extradite him, the judges have been building an extensive case against him. Their investigation has implicated him in Operation Condor, in which military governments in Chile, Argentina and Uruguay coordinated anti-leftist campaigns that involved the killings of foreigners. In a similar case, members of Pinochet's secret police were jailed in the assassination of former ambassador Orlando Letelier, who was killed by a car bomb in Washington in 1976.

Pinochet's arrest shocked Chile and the rest of the Spanish-speaking world. At the Ibero-American summit in Oporto, Portugal, Chilean President Eduardo Frei said his government is "filing a formal protest with the British government for what it considers a violation of the diplomatic immunity which Senator Pinochet enjoys." Chile maintains that it does not recognize the authority of foreign courts over events that occur within its borders.

In Santiago, where the army has maintained a strong role even after Pinochet relinquished power to a democratically elected president in 1990, there was particular shock today -- especially since media reports were sketchy on details of Pinochet's arrest. But shock quickly turned to disbelief, horror or joy.

Although nine lawsuits have been filed against Pinochet in Chile by relatives of people killed during his time in power, the cases have gone nowhere. Pinochet had legal immunity as army chief until he retired from that post on March 11. The next day, he was sworn in as senator for life, a position he arranged for himself in the 1980 constitution that provided for the restoration of limited democracy to Chile.

His foes in Chile have looked to Spain as perhaps the only place where Pinochet could be held accountable for his actions, but his arrest was more than many of them could have hoped for.

"I am experiencing profound happiness that what couldn't happen in Chile is finally happening abroad," Hortensia Bussi de Allende, widow of the former president, said in a telephone interview. Her husband, who served as president from 1970 to 1973, was found dead after Pinochet's forces attacked the government palace during the coup.

"Here is a man responsible for so many deaths, so much suffering, so much torture, and yet we have never been able to get so much as a trial for him here in Chile," she said.

Pinochet has traveled to Europe many times, although he has avoided Spain. Originally, Pinochet had planned to go to Paris before his trip to London, but the French denied him a visa. One Chilean army source, who spoke on condition of anonymity, said today that the denial tipped Chilean authorities to the difficulties Pinochet might face abroad, so they went to great lengths to ensure that he traveled to London on a diplomatic passport for his medical procedure. Army sources say they had already researched international law and found that, as a senator, Pinochet should be granted diplomatic immunity.

"It's totally amazing and completely illegal," said a Chilean army source, who spoke on the condition that he not be named. "Pinochet was traveling on a diplomatic passport. Absolutely no legal respect for his position is being applied."

The source said the Spanish judges, to encourage the arrest, used information that at least three British subjects were killed in Chile during Pinochet's rule. The judges' petitions are based on the European Convention on Terrorism that requires signatories to cooperate with each other's judicial processes in terrorist cases, said Juan Garces, a lawyer involved in the Spanish investigation.

That seemed to be enough for the British to act. Prime Minister Tony Blair's office said it was "a matter for the magistrates and the police." CAPTION: Anti-Pinochet protesters gather outside the London clinic where the former military ruler is said to be held. ec