BETHLEHEM, Occupied West Bank (AP) _ Israeli troops on Tuesday seized the body of a Palestinian teen-ager after mourners at the funeral began hurling stones to protest his death at the hands of soldiers.

In Gaza City, assailants threw a hand grenade from a hospital and wounded two soldiers, an army spokesman said. It was one of the few times live weapons have been used against Israelis since the Palestinian uprising began Dec. 8.

The Bethlehem disturbance began after a resident of the nearby Dheishe refugee camp died after being shot in the head with a plastic bullet during a Sept. 28 clash with troops, Dheishe residents said. The 18-year-old victim was identified as Nazem Abu Juda.

News of Abu Juda's death spread quickly.

Palestinians keeping watch outside his hospital room took the body to Dheishe minutes after he died.

Announcements blared through mosque loudspeakers and called on residents to participate in funeral services and pay tribute to the family of the ''martyr.'' The body was hidden from soldiers.

The army responded by declaring a curfew on Dheishe and closing all entrances to the camp. But the youth's body already had been taken out of the camp to Bethlehem.

When stone-throwing erupted during his funeral, four soldiers jumped aboard the red van carrying the body at the head of the procession. Military jeeps pulled up in front and back of the van, and the soldiers forced the van driver to drive away.

Dozens of Palestinian youths, some in masks, then called a strike in the biblical city, demanding that shops close and cars stay off the roads.

While they enforced the strike, the youths hurled firebombs at soldiers, and troops fired rubber bullets and live ammunition in the air to disperse crowds. At least five Palestinians were arrested, the army said.

A military spokesman said one Palestinian was wounded. Arab witnesses said he was 19 and was shot in the side with a plastic bullet.

Abu Juda's death raised to 295 the number of Palestinians killed in the 10- month rebellion against Israel's occupation of the West Bank and Gaza Strip. Six Israelis have died.

An army spokesman said troops took the body to halt a large demonstration. He said it would be returned ''at a time when we know it will not cause disturbances in Bethlehem.'' The driver of the van was released.

The hand grenade exploded near the first vehicle in a military patrol driving through Gaza City, said an army official who spoke on condition of anonymity.

The soldiers were hit in the legs by shrapnel and taken to Barzilai hospital in the nearby Israeli city of Ashkelon. They were listed in good condition, the spokesman said.

Other soldiers in the patrol opened fire in the air, the spokesman said. The army then closed off the area and began searching for the assailants.

Also Tuesday, a Palestinian laborer from the Gaza Strip was killed by an Israeli youth when a fistfight erupted at a construction site in the central Israeli town of Lod, Israel radio and police said. Police said the motive appeared to be personal.

The radio said the 17-year-old Israeli, whose name was not given because he is a minor, was working on a rooftop with Jamil Shiali, 47, when the two got into an argument. Shiali died after being punched in the stomach, although the exact cause of death was not known, it said.

In the Gaza Strip, troops shot and wounded an 11-year-old boy during clashes with stone-throwing youths who blocked roads and set tires ablaze in Khan Yunis, hospital officials said

Israeli authorities reopened 33 Gaza high schools, allowing about 20,000 students to return to classes after a prolonged summer vacation aimed at preventing anti-Israeli activism. All West Bank schools are closed until Nov. 15.

The army also decided to put two reserve officers, a captain and a first lieutenant, on trial on charges of using excessive force while arresting four Arab stone-throwers in the Gaza Strip town of Rafah in July, Israel radio said. The army said it was checking the report.

The radio said the Palestinians complained that the officers forced them to stand against a wall while they beat them, and later threw them on cactuses. It said military police found no evidence to substantiate the last claim.

Also Tuesday, Palestinians stoned an Israeli car and a bus in Arab east Jerusalem's main shopping district, Israel radio reported. An assailant also hurled a firebomb transporting 37 Arab workers from the Galilee village of Kafr Kanna to Afula, the radio said. It said one Arab was injured.