ROME (AP) _ The government Saturday ordered a reduction in the number of Libyan diplomats in Italy and said it might cut back on its own diplomatic mission in Libya.

A Foreign Ministry spokesman told The Associated Press the measure would cut by 10 the number of Libyan diplomats, to a total of 36 at the embassy in Rome and consulates in Milan and Palermo.

The spokesman, speaking on condition of anonymity, also said the remaining Libyan diplomats would need special permission to travel outside the area where they are accredited.

Premier Bettino Craxi was quoted by Italian news agencies as saying the measures were ''completely justified.''

''They were taken after a thorough examination and in conjunction with the decisions made along with the other European nations,'' he said after he and French Premier Jacques Chirac met and discussed terrorism and other issues.

''The examination of the issue continues and one cannot exclude that other measures might have to be taken,'' Craxi said, but did not elaborate.

A ministry statement said Libyan Ambassador Abdul-Rahman Shalgam was summoned and told of the new order. A spokesman for the Libyan Embassy in Rome, who refused to give his name, said, ''It is too early to comment now.''

The Italian news agency ANSA quoted unidentified government sources as saying Italy did not ask specific diplomats to leave, but left it up to Libya.

The ministry spokesman said they would be expected to leave within a few days.

The government said the move was in line with a decision Monday by ministers of the 12 Common Market nations to impose diplomatic sanctions on Libya because of its alleged involvement in international terrorism.

It said Italy was studying possible reductions of its diplomatic staff in Libya, which now numbers several dozen. Italy also represents British and Irish interests through its embassy in Tripoli, the Libyan capital, and consulate in Benghazi.

Rome also renewed its pledge to bar from Italy any Libyans expelled from other European nations for alleged terrorist activities.

The Foreign Ministry statement said there would be ''stricter surveillance'' of the use of diplomatic immunity and diplomatic pouches by all nations suspected of involvement in international terrorism. It did not elaborate.

West Germany, France, Spain, Belgium, Denmark, the Netherlands and Luxembourg all announced plans this week to order out Libyan diplomats. Portugal said it would closely monitor the activities of Libyan diplomats in Lisbon.

There are no Libyan diplomats in Ireland, and Britain broke off relations with Libya in 1984. Greece is the only Common Market nation that has refused to join the measures.

A former Libyan embassy clerk, Arebi Mohammed Fituri, was arrested in Italy last week on charges of illegal arms possession in an alleged plot to kill U.S. Ambassador Maxwell Rabb.

Authorities said Fituri and another former Libyan diplomat, Mussbah Mahmud Werfalli, allegedly furnished a pistol to a third Libyan last year to attack the ambassadors from the United States, Saudi Arabia and Egypt. Werfalli is currently being sought on charges of illegal arms possession.

The third man, Rageb Hommouda Daghugh, was arrested last year after Italian investigators said they uncovered the purported plot.