NABLUS, Occupied West Bank (AP) _ A parade of Palestinians troops through Mayor Zafer al-Masri's office: a robed man whose thumbprint signature must be validated, a woman with worry beads whose son has been arrested by Israeli soldiers, a tearful woman seeking welfare.

Al-Masri, a moderate pro-Jordanian Palestinian, was appointed recently by Israeli authorities to replace the Israeli military officer who ran the West Bank's largest city.

The 44-year-old mayor is the most tangible manifestation of Prime Minister Shimon Peres' pledge to improve the quality of life under Israel's 18-year-old military occupation.

Military officers run 17 of the 25 cities and towns in the West Bank, where 800,000 Palestinians live. If al-Masri succeeds, Peres has pledged to replace three other military administrators with Arab politicians.

But Peres has also said that while elections were ''a good idea'' they would not be held in the near future because of possible disruptions by the Palestine Liberation Organization.

''There is tremendous pressure on the PLO right now to increase terror inside the territories'' occupied by Israel, Peres said at a recent briefing.

Peres also said Israel had acceded to a long list of Palestinian requests, including more industries, two new hospitals and less book censorship. ''Really we would like to see their standard of life improved, their freedom of movement guaranteed provided it not be used for terror and violence,'' he said.

U.S. Secretary of State George P. Shultz encouraged Israel to take a series of such steps as a means of building Palestinian confidence in a new Mideast peace process.

But the pace of change has been slow and the peace process itself is stalled over who will represent the Palestinians, moderate West Bank leaders as Israel wants or officials of Yasser Arafat's PLO.

The mayor, the uncle of Jordan's Foreign Minister Taher al-Masri, demurs at the suggestion he plays a larger role: ''I want to improve life for my people through normal municipal services. ... I don't want to be mixed up with the overall political aspects.''

Al-Masri said in an interview in his office that it was unfortunate that his appointment came at a time when Israel and the Americans were considering peace talks with a Jordanian-Palestinian delegation.

The mayor said he sees his role as transitional until the Israeli authorities allow new elections. Balloting was last held in the West Bank in 1976.

He is the chamber of commerce director and was deputy mayor of this city of 100,000 people until Israel deposed Mayor Bassam Shakaa and his city council in 1982 for alleged anti-Israel incitement.

''I'm the closest thing to an elected official. But this (appointment) is not instead of elections,'' said al-Masri, who walks a fine line even though he is believed to have assumed office with tacit approval from Jordan's King Hussein and the PLO.

For example, he meets weekly with Israeli officers of the West Bank's military administration to discuss municipal projects which they must approve. ''I don't socialize with them or make jokes. We deal with my people's business, and I can't ignore them,'' said al-Masri.

The mayor appears to be a popular figure in the city 30 miles north of Jerusalem. A lecturer at the city's al-Najah University, asking not to be identified, estimated that if free elections were held al-Masri would win 70 percent or 80 percent of the vote.

Shmuel Goren, coodinator of government activities in the occupied territories, said recently that after months of delay Jordan had given approval for several West Bank families to negotiate with Israel over the creation of an Arab bank.

Goren also said negotiations were under way to improve the telephone network in the West Bank and restrictions on international telephone and telex dialing were being eased.

One of the major impediments to implementing the Israeli improvements has been a wave of terrorist actions in which 18 Israelis were killed in the last year in and around the occupied territories, according to Israeli army figures.

The latest killing occurred in the center of this city on Jan. 11. The army imposed a curfew after an Israeli border policeman was shot to death and another wounded.

The government adopted tough punitive measures in August to combat the violence: 96 Palestinians have been detained for six-month periods without trial, and four have been ordered deported. Dozens of Palestinian homes have also been demolished or sealed with cement.

Some Palestinian intellectuals say they are not impressed by the Israeli gestures.

And an Israeli journalist who covers the West Bank, Yehuda Litani of the independent daily Haaretz, wrote recently that in the absence of effective government policy, West Bankers ''will continue to see mainly the big stick that beats so well, and will forget the carrot, which is small, stunted, and unfortunately, symbolic at this stage.''