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BAGHDAD, Iraq (AP) _ Near the end of allied bombing raids early today, two missiles hit a bomb shelter and exploded inside, the civil defense said. It said 500 people were killed.

In Riyadh, Saudi Arabia, a U.S. military spokesman, Marine Brig. Gen. Richard Neal, said the shelter was a military bunker used as a command and control facility. He said he could not explain why civilians might have been staying inside and said it was a ''legitimate military target.''

Rescuers clawing through the debris said they found only eight survivors immediately after the 40-foot-deep concrete facility was bombed. By nightfall, they retrieved more than 235 bodies, said Abdul Razak Hassan al-Janaby, a supervisor of the facility. He said at least 300 more were believed to be trapped in the wreckage.

Civil Defense officials said lists compiled from residents reporting on missing relatives and neighbors also indicated there were more than 500 people inside the shelter when it was destroyed at 4 a.m. (8 p.m. EST Tuesday.)

Witnesses said most of the recovered bodies were charred and mutilated beyond recognition, although some clearly were children.

Smoke still rose from the rubble at nightfall, and about 5,000 people were gathered nearby, some awaiting word about missing relatives.

Witnesses said the first missile hit the entrance, jamming the only escape route from the shelter. The second missile, moments later, penetrated the 9- foot-thick concrete roof and exploded inside the windowless shelter, the witnesses said.

Reporters were taken to the site in the residential al-Amerieh district by Information Ministry officials.

More than 40 charred bodies were laid out on the ground at a time as dozens of ambulances shuttled to morgues and back.

As reporters watched, the decapitated body of a woman was pulled out and laid next to a small torso - apparently that of a girl whose head and limbs were blown off.

Residents of the middle-class neighborhood crowded the scene, looking for relatives and friends. Men beat on their chests and yelled ''Allahu Akbar 3/8'' Arabic for ''God is Great.'' Women cried hysterically.

A senior civil defense official said there was no hope anyone remained alive.

''There are no survivors there anymore. The fire is melting the metal. There's no way any human being could have survived until now,'' he said on condition of anonymity.

Health Minister Abdel-Salam Mohammed Saeed told reporters there were 1,000 people inside the shelter, one of five similar structures built during the 1980-88 war against Iran and designed to hold twice that number. He called the attack ''a well planned crime.''

Other civil defense officials said 400-500 people had moved into the facility since the allied bombing of Iraq began Jan. 17. Because allied attacks on the capital were particularly intense Tuesday and today, many more people sought refuge in the fortified structure overnight, the officials said.

The survivors were taken to nearby Yarmuk Hospital, and only two of them appeared conscious. All suffered burns.

''Look at him. He's the only one alive of my family,'' said Karim Mohammed. A teen-age boy, who Mohammed said was his son Abdullah, lay unconscious on a bed at Yarmuk Hospital.

Mohammed, a lawyer, said he sent his wife, two daughters and son to the shelter earlier and was trapped at home as the air raids escalated. He said he had been waiting for a lull so he could run down the street to join them, but the shelter was hit before he got there.

One teen-ager, Omar Adnan, said he was the only one in his family to escape alive. He said his three younger sisters, mother and father all died.

In a faint voice, Adnan, 17, said: ''I was sleeping and suddenly I felt heat and the blanket was burning. Moments later, I felt I was suffocating.

''I turned to try and touch my mother who was next to me but grabbed nothing but a piece of flesh,'' he said.

No military installations are known to be near the neighborhood. Several large arrows with the word shelter written on them in Arabic and English pointed to the shelter. A nursery school, a supermarket and a mosque surround the facility.

Allied officials have said they are bombing only military and strategic targets, but that some civilian casualties are inevitable.

Dozens of other Baghdad neighborhoods were hit in intensive overnight bombing sorties, which residents described as among the severest on the capital since the U.S.-led allies launched the air war.

The air raids lasted for 12 hours, letting up at 8 a.m.

Reports of casualties from districts other than al-Amerieh were not immediately available.