AOUZOU, Aouzou Strip (AP) _ Libyan military officers Saturday displayed arms and Chadian soldiers they said were captured in retaking this desert outpost from Chad.

Chad continued to deny that Libya recaptured the village of Aouzou in its first victory after a string of costly defeats in the border area, which both countries claim as their own.

But Libya took six Western journalists to the battle site, about 40 miles south of the internationally recognized border between Libya and Chad, to see the spoils of war and its victims.

Libya's JANA news agency had announced earlier that Libyan forces captured Aouzou on Friday after a two-hour fight. State-run Libyan radio also carried the announcement and congratulated the military.

''We have no desire or wish to kill anybody, but this is our land,'' said 45-year-old Col. Ali Sherif Rify, who led the Libyans. ''The situation forced us to use all the facilities we had to recapture this land.''

The visit offered a rare glimpse of the front, which has seen renewed fighting over the past few years.

Libya annexed the 43,000-square-mile Aouzou Strip, a barren and sparsely populated piece of land across the northern border of Chad, in 1973. Libya claims the land on the basis of a 1935 treaty between Italy and France that was never ratified.

Chad contests this claim, and no other country recognizes the annexation.

Rify said Libyan forces, using mostly Soviet aircraft, attacked the area first by air, then closed in on the ground and waged a two-hour battle.

There was no definite estimate of casualties on either side. Libyan military officials said Chadian deaths numbered in the hundreds, but only about 25 to 30 bodies were seen.

Late Saturday, a JANA dispatch monitored in London said Chad had suffered 460 dead and 877 wounded in the fighting, while 10 Libyan soldiers were killed and 18 were wounded. Libyan radio quoted the Armed Forces General Command as saying 600 Chadians were killed and 877 were wounded. It did not mention Libyan casualties.

There were few signs of hand-to-hand combat in the village, but much of it was in ruins from what appeared to be heavy bombing. Piles of Chadian armaments and supplies were scattered about the village and on the sandy road that led to it.

Strewn in the area were the scarlet berets of the Chadian army, their insignia readily identifiable, apparently abandoned in haste. There were tins of Chadian-made tomato paste, cartons of cigarettes and on the wall of a deserted school house where Libyan soldiers lunched on dates and cans of Pepsi Cola, a bold message was scrawled in French:

''The Chadian Armed National Forces took Aouzou on the 8th of August, 1987.''

The officials said many Chadians fled, and they showed reporters six captured Chadian soldiers and added that 15 others were also being held. The Libyans said three of their own soldiers were killed and five were wounded.

Many of the captured jeeps, armored personnel carriers and artillery were French- or American-made.

The Chadian army said fighting for control of the area continued Saturday afternoon, according to an Agence France-Presse dispatch from the Chadian capital of N'Djamena.

But the French news agency quoted anonymous sources in Paris as saying Chadian troops retreated from the Aouzou region to Bardai, about 25 miles southwest.

The only sign of Chadian resistance was an occasional burst of machine-gun fire rippling through the valleys of the bleak surrounding Tibesti mountains.

Rify said the key element in the victory was ''surprise'' and that Libyans were still mopping up isolated pockets of resistance. He did not elaborate.

A Libyan military statement broadcast by Libyan radio also said its air force conducted operations inside Chadian territory in pursuit of ''scattered remnants of the agents.''

The Aouzou region, believed to be rich in uranium and other minerals, is about 900 miles south of the Libyan capital of Tripoli.

President Hissene Habre's army drove the Libyans from the rest of northern Chad in March, and he vowed to retake the Aouzou Strip.

Libya has mounted steady air raids on the northern towns. Its reported capture of Aouzou village came after two unsuccessful attempts to retake it and surrounding areas this month.

Chad says it has killed 1,225 Libyan solders and captured 360 in battles this month. The claim could not be independently verified, but West European diplomats said it appeared to be a reasonable estimate.

French Defense Minister Andre Giraud said Saturday that France does not intend to get drawn into the battle for the Aouzou Strip. He said he could not confirm Aouzou village had been retaken.

France maintains as many as 1,500 troops in Chad and provided logistic and material support for Chad's victories in March. France has said the Aouzou question should be put to international arbitration.