The Palestinian crowd surged forward, hurling stones, its front ranks ripping at a blue and white Israeli flag near the municipal police station. The Israeli police fired tear gas and then, to a chorus of angry shouts from the demonstrators, loosed gunfire into the air.
No one was injured. The confrontation March 30 was less remarkable than was its location: not on the West Bank of the Jordan or in the Gaza Strip - areas wrested from the Arabs in the 1967 Mideast war -- but inside Israel itself, in the biblical area of northern Israel known as Galilee.
The demonstrators hailed from what Israelis, among themselves, often call ''our Arabs'' -- a Palestinian minority rooted in those Arab families that did not flee in the 1948 war accompanying the birth of modern Israel. For a long time ''our Arabs'' were more docile, more willing to accept the Israeli state, than Arabs anywhere else.
Yet gradually that has been changing.
The Israelis' recently escalated struggle for unchallenged political control over the West Bank and the Gaza Strip seems to have given a further nudge to the change.
This seems particularly, though not exclusively, true for the youth among Israel's roughly 600,000 Arab citizens. And an increasing number of Israeli Arabs is young. The average age is roughly 20, a decade younger than the average for the Israeli Jewish population of over 3 million.
A concerted, violent uprising among Palestinians inside Israel seems, in the short run, as likely as such a surge in the West Bank or Gaza. That is to say, not very likely. Palestinians on both sides of the occupation line, have insufficient political organization and virtually no weapons as far as is known. Palestinian society, whether among formal Israeli citizens or the West Bankers and Gazans, is traditionally conservative, a fact that is changing, but slowly.
Still, in the long run, the prospect of a radical, common front among Israel's own Palestinians and those whose territory it rules as an occupying power clearly has Israel worried.
It is an index of this concern that a senior government official termed the sporadically violent Palestinian protests inside Israel March 30 ''a defeat'' for extremists. The implication: things, after all, could have been worse.
Israeli Arab activists had hoped for a blanket general strike in their towns and villages to mark ''Land Day'' -- the annual commemoration of a 1976 riot in which six Arabs died while protesting seizure of Arab land inside Israel -- and to express solidarity with recent disturbances in the West Bank and Gaza. As it turned out, a minority of the Galilee, where the great majority of Israeli Arabs lives, responded to the strike call - and for the most part, peacefully.
The Jerusalem Post newspaper said openly March 31 what more than a few Israelis of varing political colors have suggested privately:
''The (general) peacefulness of . . . Land Day should not lead anyone in authority into illusion.'' The Israeli government's drive for uncontested control of the occupied West Bank and Gaza - which saw a pro-Israeli West Banker injured in a car bomb explosion March 3l, the 13th straight day of unrest in the areas -- ''is bound sooner or later to affect the thinking of Arabs within Israel . . .''
''The danger remains . . . that the condition of their kinsmen in the West Bank and Gaza will radicalize Israel's Arabs beyond any measure warranted by their own situation, the Post commented.''
Israeli authorities have long counted on the relatively comfortable ''situation'' of Israeli Arabs to defuse any serious political radicalization among them.
For some time that strategy has worked. The general economic lot of Palestinians inside Israel has, for many years, exceeded that of their refugee brethren. Politically, too, Israeli Arabs have been generally left in peace so long as they avoided making unseemly waves. Besides, most Israeli Arabs accepted not too long after the first, 1948 war between Israel and the Arab world what other Arabs refused -- the idea that the Israeli state, whether Arabs liked it or not, was there to stay.
The first, and still most serious, jolt to the status quo between Israeli Jew and Israeli Arab came in 1967, however.
In six short days Israel humbled three Arab states and, in the process, took control of the West Bank and Gaza, tripling the number of Palestinians under Israeli rule.
As one Israeli Arab intellectual recalls, ''slowly it became clearer that we did not really have a logical place in Israeli society . . . If only because the state made it clear that it saw us, Israeli Arab citizens, in very much the same way as it saw the West Bankers or the Gazans.''
The second catalyst for Israeli Arab change, particularly affecting younger Palestinians here, was the emergence after 1967 of a truly independent Palestinian political voice - in the shape of Yasser Arafat's Palestine Liberation Organization.
Other factors played a more gradual role. If Israeli Arabs had long enjoyed a generally better economic status than refugee Palestinians, that deal was still nowhere near what accrued to Israeli Jews. The Arabs tended to get less attractive, lower paying work.
Officially, the Palestinians at home were also considered security risks. This meant they did not, and do not, serve in the Israeli Army -- a policy they welcome. Yet the distinction also meant that various professional opportunities requiring a security clearance were denied Israeli Arabs. Moreover, some housing subsidies and other social benefits are linked to military service -- and thus automatically exclude the Israeli Arabs.
At the same time, one benefit they have received -- education -- has tended to make young Israeli Arabs more sensitive to all forms of discrimination. As a result young Israeli Arabs have grown increasingly frustrated and angry - and more Arab than Israeli in political feeling. Thus one politically moderate Arab remarks privately here that it was ''not really surprising'' that Israeli Arab youths should swarm a Galilee police station and shred the flag of the Israeli state whose passport they hold.
''One should not overdo the seriousness, or the novelty, of such a demonstration,'' he says, noting that anger and alienation have been building since 1967. Yet the trend itself, the man adds, must be taken seriously. ''And it will continue . . . .
''Once the rest of the Sinai is handed back to Egypt (April 25), the Israelis will be focusing on expanding their presence on the West Bank and Gaza . . . . The Palestinians - and this includes those inside Israel - will naturally be seeking just the opposite.''