NICOSIA, Cyprus (AP) _ Hezbollah, a Shiite Muslim group formed by Iranian leaders as a spearhead for spreading their Islamic revolution, grew into one of the Mideast's most feared guerrilla groups.

It is the parent movement for extremist factions that held most of the Western hostages in Lebanon and was responsible for the suicide bombing that killed hundeds of U.S. Marines in Beirut in 1983.

Organized in 1982 under Iran's attempt to spread the fundamentalism of the late Ayatollah Ruhollah Khomeini, Hezbollah was led by Sheik Abbas Musawi, who was killed in southern Lebanon on Sunday in an Israeli attack.

The group, whose name in Arabic means Party of God, has a hard core of about 3,500 fighters. But it can call on thousands more activists trained by Iranian Revolutionary Guards sent to Lebanon when Israel invaded in June 1982.

It is financed by Tehran and aided by Iranian and Syrian intelligence.

Hezbollah carried out suicide bombings against American, French and Israeli troops in Lebanon in the mid-1980s.

Its bloodiest attacks came Oct. 23, 1983, when suicide drivers rammed trucks packed with explosives into a U.S. Marine barracks, killing 241 Americans, and a French paratroop base, killing 59.

Its various underground factions, such as Islamic Jihad, or Islamic Holy War, are believed responsible for terrorist attacks throughout the Middle East, western Europe and Asia. They hijacked several airliners between 1984 and 1989.

Hezbollah's military wing, the Islamic Resistance, is waging a guerrilla war along with other Muslim and leftist factions against Israeli and allied troops in the Israeli-occupied ''security zone'' in southern Lebanon.

For the past six years, Hezbollah has battled the more secular Syrian- backed Shiite Amal militia for leadership of Lebanon's 1.2 million Shiites, the country's largest sect.

An uneasy truce negotiated by Syria and Iran took hold two years ago, but scattered clashes still occur.

During the 1980s, nearly 100 foreigners were kidnapped in Lebanon.

At least eight were eventually killed, including three Americans: CIA officer William Buckley, university librarian Peter Kilburn and Marine Lt. Col. William R. Higgins.

The longest-held Western hostage in Lebanon, Terry Anderson, the chief Middle East correspondent for The Associated Press, was kidnapped March 16, 1985 and released Dec. 4.