JERUSALEM (AP) _ A plainclothes officer shot and wounded two Palestinians who stoned his car Monday and smashed the windshield, police and witnesses reported.

The shooting occurred shortly after midday on a crowded main street near the old walled city in East Jerusalem, the Arab quarter.

Jerusalem police spokesman Rafi Levy said the man opened fire after two Palestinians, apparently teen-agers, began throwing stones at his car.

One was hit in the stomach and the other in the arm and both were taken to Makassed Hospital, he said, but would not give further details.

A police source, speaking on condition of anonymity, said the man was a member of the Shin Bet intelligence service.

Elias Zananiri, a reporter for the Palestine Press Service, said he heard four shots and saw two running Israelis armed with pistols. It was not clear whether both had fired, he said.

''I heard the shooting and ran downstairs. I saw a smashed windshield. ... Lots of people gathered around,'' said Zananiri, whose second-story office overlooks the scene of the clash.

Police arrested five Palestinian university students after firing tear gas to disperse dozens of protesters outside the British consulate in Jerusalem, Levy said. No inuries were reported.

The demonstrators from Bir Zeit University in the occupied West Bank were protesting in sympathy with more than 4,000 Palestinian prisoners who are on a mass hunger strike in Israeli jails, the Palestine Press Service said.

Police said eight wives of hunger strikers were detained in Jerusalem during a march.

The strike began two weeks ago, said the news agency, which monitors developments in the territories Israeli captured in the 1967 Middle East War.