2 Arabs Killed on Uprising’s 2nd Anniversary : Israel: Most Palestinians stay indoors. The army puts on a show of force.

Israeli soldiers shot to death a Palestinian woman and, later, a man who attended her funeral Saturday on the second anniversary of the Arab uprising, a day most Palestinians spent indoors watching anniversary events broadcast on television from neighboring Jordan.

The shootings took place in the village of Bani Naim, near the West Bank town of Hebron. Palestinians, in a street demonstration, had marched with flags and chants to protest Israeli rule. When soldiers appeared, they threw stones. Soldiers shot into the crowd, killing a 22-year-old woman; a government radio report said the troops had fired at masked youths as permitted under army rules. Later, at her funeral, a 26-year-old man was fatally shot.

Elsewhere, the occupied West Bank and Gaza Strip were relatively quiet. A massive deployment of troops above the normal 15,000 level of strength discouraged demonstrations. The 700,000 residents of the Gaza Strip as well as Nablus, the West Bank’s largest city, were confined to their homes under curfew. So were inhabitants of many refugee camps.

Troops imposed special punishment on Battir, a place of frequent unrest, by bulldozing huge rocks into place across the sole entrance to the village to keep cars from coming or going.

Many Palestinians spent the day behind closed doors watching Jordanian broadcasts commemorating the intifada , as the uprising is known.

Palestinian poets read nationalistic verse and dancers leaped against a set depicting an arm holding a stone. Yasser Arafat, the head of the Palestinian Liberation Organization, pledged that the creation of an independent Palestinian state “is just a stone’s throw away.”

Residents of Battir were unimpressed by Arafat’s words. “He should be more straight with us,” said Nimer, an activist in the village. “We know it will take time. We do not want to hear empty talk.”

The mood in Battir mirrored the attitude in much of the occupied territories--there is no quick fix in sight. About 600 Palestinians have been killed by Israeli troops. Another 140 have been killed by Palestinians on suspicion of working for the Israeli authorities. Forty-four Israelis have been killed.

Living standards among Palestinians are estimated to have fallen by half since the uprising began. Most young people are out of work, universities are closed by military order and schools in general open only irregularly. West Bank schools, for example, were told to shut in November for two months, even though students are already far behind in their progress through elementary and secondary school.

Despite the bitter hardship, Israeli officials expect the uprising to go on. In a briefing last week, Defense Minister Yitzhak Rabin predicted another year or two of conflict. He said the army had been unable to restore calm to the territories because of the wide support given the uprising and the hardened attitudes of activists.

Rabin described the uprising as a “war of attrition” but contended that “they have had more attrition than we.”