In the dark, twisted passageways that make a warren of this ancient city's center, a few bold Palestinians surreptitiously passed out a document last weekend denouncing the rule of Palestinian leader Yasser Arafat.

Merely having a copy of the statement is considered dangerous, because over the past three days eight leading Palestinian intellectuals and politicians who signed it have been arrested, another has been detained for questioning and two others have been placed under house arrest. Under Palestinian law, they can be jailed for months without being charged.

The document was published Sunday and signed by 20 leading intellectuals, including nine members of the Palestinian Legislative Council. It touches on familiar criticisms made by Arafat's growing number of opponents: allegations of corruption and political oppression by the Palestinian leadership, and anger over the declining chances that peace talks will recover all the territory and rights lost to Israel. But it goes further than in the past, by naming Arafat for the first time in connection with corruption charges.

Arafat has "paved the way for opportunists to spread corruption in the Palestinian community," the statement said, adding that the governing Palestinian Authority he heads "has followed a systematic methodology of corruption, humiliation and abuse against the people."

Urging others to join them in opposing Arafat's rule, the signatories declared: "The injustice cannot be stopped unless the oppressed work together against tyranny."

In the city of Nablus today, police searched for people who distributed leaflets supporting the intellectuals' challenge, according to LAW, a Palestinian human rights group. The group said two brothers of suspects were arrested and were being held until those responsible for the leaflets surrender.

The protest document is the latest sign of public discontent over the kind of state Arafat is building, and Arafat's critics say his heavy-handed reaction to the statement may only increase that concern.

"We are seeing Arafat has become very, very weak now," said Khader Skirat, the director of LAW. "First, his weakness is shown because the people are so angry with his government. Then, no one expected such a reaction to this petition. It shows that something small is driving Arafat crazy. This proves his weakness."

Senior Palestinian officials say widespread corruption and incompetent management are to be expected in a new government, and that the problems are being corrected.

Tayed Abdel Rahem, a senior aide to Arafat, said those arrested have gone too far in their criticism because they are trying to encourage Palestinians to rebel. He said the government is taking "democratic measures" to investigate their actions.

Another ranking Palestinian leader, Nabil Amr, said today that five of the people who signed the document, four of whom are in jail, now say they had not intended to harm Arafat's name or to create conflict among Palestinians.

"The timing [of the document] is sensitive," Amr told a news conference. "It comes at a time when the Palestinian leadership needs the support of the people, not internal strife in times of difficult negotiations with Israel."

In Hebron, however, the statement attacking Arafat is being welcomed by many of the destitute Palestinian workers in hundreds of unlicensed and dangerous, clandestine factories. In those places, where a 72-hour work week can pay less than $100, workers question whether the Arafat government will guarantee them minimum rights.

Conditions in Hebron's factories--and the lack of regulation by Arafat's government--burst into public view Oct. 21 when a fire in an unlicensed factory assembling cigarette lighters killed 14 women.

While Arafat promised a complete investigation, and offered the victims' families $3,000 each, the police arrested several of the workers and an investigator from the Labor Ministry, along with the factory owner.

Rami Aqel, 16, who was overcome by the fumes in the factory and dropped a tray of lighters that sparked the fire, said the workers knew the facility was dangerous. "But, we could not think about that," he said. "We are poor people. We have no choice but to work."

He was jailed after the fire and said he heard fellow workers being beaten by policemen because what they were saying was not consistent with the police's theory of what caused the accident.

"The government does not want the investigation to include conditions in the other factories," said a labor leader, who began a vigorous attack against Palestinian officials he said benefit from exploiting workers. "All of these important people in the government and in the legislature, they have businesses everywhere."

His accusations ended with the sudden arrival in his office of an agent from the Palestinian police intelligence service. The agent said nothing, but the labor leader immediately began to praise Arafat and to say there was no doubt that Palestinian officials were intent on protecting workers.

The head of the regional branch of the Palestinian General Federation of Trade Unions, Samur Natsheh, said that despite what many of its members claim, his organization does not bow to pressure from the government to keep silent on questions of safety. Even so, he was not able to name any of the hundreds of illegal factories that operate in the area immediately surrounding his offices.

Along the cramped streets, most of the metal doors are shut tight, giving the appearance of a nearly deserted quarter. But inside, in basements and on second and third floors, school-aged children and adults work to the rhythm of precariously wobbling machinery.

The heavy smell of chemicals fills workshops, which often resemble caves, with a single tiny door the only opening. The products--shoes, drinking glasses, stockings and other apparel--stack up everywhere, providing fuel for fires and making an escape difficult.

"We asked the owner for masks to protect us from the chemicals, and at least for a fire extinguisher, but nothing happens," said Adel Jabari, who was furiously cutting out pieces of leather to be assembled into shoes. "Why should he do anything? The only reason the police ever come here is for a bribe."

CAPTION: Students from the political groups Hamas and Fatah, with differing opinions about the Palestinian Authority, scuffle over control of the microphone to speak to a crowd at Bir Zeit University near the West Bank town of Ramallah on Monday.