Police using backhoes and sniffer dogs today uncovered 10 bodies, believed to be those of kidnapped Kurdish businessmen, in an Istanbul slum where they reportedly were buried by the Islamic militants who had abducted them.

The discovery of the bodies, which witnesses said were naked with their feet and arms tied behind their backs, comes a day after a shootout between Istanbul police and guerrillas with the Hezbollah militant group holed up in a luxury villa. Huseyin Velioglu, the group's leader, was killed, and two senior Hezbollah commanders were captured during the firefight, which was broadcast live on Turkish television.

The kidnapped Kurdish businessmen were said to have been strangled to death after rejecting Hezbollah's demands for protection money.

Police in recent months have stepped up a crackdown against Hezbollah militants, who are believed to be responsible for hundreds of killings in Turkey. Nine other Hezbollah guerrillas, including two women, were arrested today in separate raids in Ankara and the southern provinces of Gaziantep and Adiyaman. "We are close to finishing off Hezbollah in the same way we did" the Kurdish Workers' Party (PKK), which waged a violent 15-year campaign for an independent Kurdish state in southeastern Turkey, Prime Minister Bulent Ecevit told parliament today. "They are as dangerous as the PKK."

Hezbollah, which means "Party of God" in Arabic, emerged in Turkey's largely Kurdish southeast in the mid-1980s, around the same time the PKK launched its armed campaign. The group is not related to the pro-Iranian Lebanese militia of the same name. Soon after, Hezbollah declared war against the PKK, saying the rebels' Marxist ideology ran counter to the Islamic state it wanted to create for Turkey's 12 million Kurds.

Operating in key PKK strongholds in the southeastern provinces of Van, Batman, Diyarbakir and Mardin, Hezbollah hit men are believed to have carried out many of the unsolved murders of some 3,000 PKK sympathizers, including prominent Kurdish academics and journalists, in the early 1990s.

There have been widespread reports that some people in the Turkish intelligence services used the Islamic militants together with ultranationalist death squads in their own campaign to wipe out Kurdish dissidents. "It is absolutely clear that the state strongly encouraged, if not actually armed and trained, Hezbollah," said Yilmaz Ensaroglu, president of the Islamic-leaning Organization of Human Rights and Solidarity for Oppressed People, in a telephone interview. "Hezbollah spun out of their control."

Monday's shootout marked the first time Hezbollah and Turkish security forces have traded fire. It was not until last fall that the police began cracking down on Hezbollah in earnest with the roundup of as many as 90 guerrillas in a single operation. The arrests coincided with the PKK's decision to call off its insurrection in line with demands by the guerrillas' captured leader, Abdullah Ocalan, who was convicted of terrorism charges and sentenced to death last year. The government last week decided to postpone his execution until the European Court of Human Rights hears an appeal of his case.

Turkish security officials allege that Hezbollah is being armed and financed by Iran to undermine Turkey's resolutely pro-Western and officially secular government.

Television footage of material seized in Hezbollah safe houses during the past two days' raids showed huge portraits of the late Ayatollah Ruhollah Khomeini, Iran's revered revolutionary leader, as well as scores of guns and explosive devices, which police said were similar to those used in the fatal bomb attack carried out last October against a prominent secularist academic, Ahmet Taner Kislali.

"A neighboring foreign state is behind this highly dangerous group," said Cemil Serhadli, the governor of Diyarbakir province, in a recent interview.