HEBRON, Occupied West Bank (AP) _ Defense Minister Moshe Arens on Wednesday permitted the reopening of a West Bank university closed 3 1/2 years ago as a hotbed of Palestinian rebellion against Israel.

The conciliatory gesture came hours after Israel enlarged the Jewish enclave in the West Bank town of Hebron by moving in mobile homes for 160 Jewish students.

The United States has urged Israel to reopen universities and freeze settlement activity in the occupied territories as peace gestures.

An-Najah in the West Bank and five other Palestinian universities in the territories were shut around the outbreak of the Palestinian uprising in December 1987 because the army claimed they were flashpoints of violence.

Western governments and human rights groups have denounced the closures as collective punishment.

Since last summer, three other Palestinian universities have also been reopened, although those most politically active - Bir Zeit in the West Bank and the Islamic University in Gaza - remain closed.

Hanan Rubin, a spokesman for the Israeli military government, said that Arens on Monday met with Hikmet al-Masri, chairman of An-Najah's board of trustees, to set the terms for reopening.

Arens asked for assurances that administrators, not students, run the university, and that there be no violence, Rubin said. Classes are to begin in November.

An-Najah, in the West Bank's largest city of Nablus, has been plagued by clashes between rival pro-PLO and Muslim fundamentalist factions.

Meanwhile, Palestinians throughout the West Bank and Gaza Strip on Wednesday observed a general strike to protest Jewish settlement building.

U.S. Secretary of State James A. Baker III has said settlements are the biggest obstacle to peace.

At the same time, trucks in Hebron unloaded 10 trailers at a former Arab bus terminal confiscated by the army in 1983.

The trailers are to house about 160 Jewish students of the Shavei Hebron Seminary. Settlers claim the bus terminal was built on what was once Jewish- owned land.

Defense Ministry spokesman Danny Naveh said the students would live in the trailers until their nearby seminary building is renovated. ''This is not a settlement, it is temporary housing,'' Naveh said.

Settler leader Aharon Domb, director of the seminary, said renovation would take about two years.

In Hebron and elsewhere in the occupied lands, some settlements set up as temporary structures have become permanent.

''I think the intention of those building settlements in this holy city now is to explode the peace process,'' said Mustafa Natshe, a former mayor of Hebron who was removed from the post by Israel in 1983, referring to a U.S.-proposed Middle East peace conference scheduled for October.

The army declared Hebron a closed military area.

Hebron, a city holy to Jews, Moslems and Christians as the burial site of the biblical patriarchs Abraham, Isaac and Jacob, is a flashpoint of tensions of the uprising. In all, 80,000 Palestinians and about 500 Jews live in the city, 25 miles south of Jerusalem.