MOSCOW (AP) _ A fire that ravaged the U.S. Embassy on Thursday knocked out America's most important listening post in the Soviet Union at a time of domestic upheaval and sensitive arms talks.

The fire in the 10-story building, which forced more than 200 employees to flee, was caused by welding sparks in an elevator shaft under renovation, the official Tass news agency reported. Flames swept to the attic and badly damaged the antenna-covered roof.

The six-hour fire destroyed areas that house the building's sensitive communication links. The mustard-colored, brick-and-plaster building is on busy Tchaikovsky Street, less than a mile from the Kremlin, the nerve center of Soviet power.

A U.S. source in Washington, speaking on condition of anonymity, said 80 percent of the embassy's capabilities were destroyed and that virtually all secure communications had been halted.

The United States has plenty of use for its eyes and ears in Moscow at a time when the Soviet Union is struggling with economic strife, ethnic clashes, and political dogfights between reformers and orthodox Communists.

In addition, Washington is trying to negotiate a strategic arms treaty and a conventional arms deal with Moscow. Those talks are holding up a Moscow summit between President Bush and President Mikhail S. Gorbachev.

The embassy, which has been rented by the U.S. government since 1953, has been plagued by fires and espionage intrigue ranging from mysterious microwave bombardments, bugging, and a sex-for-secrets scandal involving Marine guards.

A new embassy complex less than a block away has not been completely occupied because the Soviets laced its main office building with electronic listening devices during construction.

The State Department has proposed a $200 million job to remove the top floor of the new building to remove the bugging devices. Three new floors would be added for top-security operations.

The blaze Thursday caused no serious injuries, U.S. and Soviet officials said. A Marine, an American construction worker, and a Soviet firefighter were treated for smoke inhalation, U.S. State Department spokesman Richard Boucher said in Washington.

The fire was reported at 10:22 a.m. At one point, 180 Soviet firefighters were on the scene. Marine guards accompanied the firefighters to some areas, embassy spokesman James Bullock said.

Bullock said the most heavily damaged section of the embassy was its center, where the roof caved in. The roof protected areas where the embassy's most secret business was conducted. That section is out of commission for ''the indefinite future,'' Bullock said.

He denied a report by Tass that U.S. officials had refused to allow Soviet firefighters into the building for 40 minutes. Soviets have been barred from most sections of the embassy for more than four years, and Americans did the renovation.

The fire sent diplomats scrambling for new offices and in a few cases, new apartments, as they struggled with the crowded U.S.-Soviet agenda. However, Bullock said a residential wing of the embassy had been largely spared.

He said alternative ways of sending secure communications had to be found. Some computer files in the busy consular department were knocked out. State Department specialists were sent to Moscow to assess the damage.

State Department sources said embassy officials were so concerned about dangerous conditions during reconstruction they sent a memo to senior officials warning of accidents.

The building has suffered two previous fires: a minor blaze in one room in 1988 and a serious fire that swept through the top floors in August 1977.

In 1987, two members of Congress called the building ''a firetrap and unsafe by accepted standards for general working conditions.''

Beginning in 1967, the United States made diplomatic protests to the Kremlin that the Soviets were bombarding the moldering building with microwave radiation.

A former Marine sergeant at the embassy was court-martialed in 1987 following allegations that he had an affair with a Soviet woman who introduced him to a spy.