The PLO on Thursday accused fighters of a pro-Iranian militia of killing a Palestinian guerrilla and wounding three others deployed to quell battles between Shiite Moslem militias in south Lebanon. The fundamentalist Hezbollah, or Party of God, issued a statement in Beirut denying the PLO charge and said its fighters ``did not fire a single shot on Palestinian positions.'' But a Sunni Moslem cleric, Sheik Maher Hammoud, who maintains close ties with Hezbollah, said fundamentalist fighters fired at the Palestinians on the strategic Hamade hill, which overlooks the forward lines of Hezbollah and its rival militia, the Syrian-backed Amal. The militias have been fighting intermittently since May 1987 for dominance of Lebanon's 1.2 million Shiites. The latest battles have been waged on the fringes of PLO strongholds, in south Lebanon's Iqlim al-Tuffah, or apple province. About 700 members of Yasser Arafat's Fatah movement were deployed last week to try to disengage the warring factions, and no major clashes have occurred since Monday between the militias. The PLO claimed Hezbollah gunners opened fire on a PLO disengagement force Wednesday, killing one guerrilla and wounding three. The commander of the Fatah force, identified only as Col. Abu Fadi, said the guerrillas ``will be forced to return fire to defend ourselves'' if Hezbollah fires on them again. A police spokesman, who cannot be named under standing regulations, said Hezbollah believes the PLO intervention has helped Amal and stopped Hezbollah from taking the entire region. Police could not confirm the Palestinian casualties. They said the bodies of two slain Hezbollah fighters were found early Thursday in Iqlim al-Tuffah. The police spokesman said the two men were apparently slaughtered by Amal militiamen after being taken captive. Police said one Hezbollah gunman was also killed and two Amal militiamen were wounded in a brief shootout in the village of Arki, six miles southwest from the main area of fighting. The casualties, excluding the Palestinians, upped the overall toll to 97 dead and 277 wounded since the current round of clashes broke out Dec. 23. Fatah's political chief in the southern city of Sidon, Zeid Wehbe, refused a Hezbollah appeal for the withdrawal of Arafat's men from Iqlim al-Tuffah. ``We are not an occupying force to be asked to withdraw,'' Wehbe said in a statement published in several Beirut newspapers. ``We are a disengagement force. When fighting is over and its consequences are solved, we will return to our previous bases,'' he was quoted as saying by the independent An-Nahar daily. Iran's deputy foreign minister, Mohammad Ali Besharati, who is in Beirut trying to enforce a cease-fire, has warned of the dangers of the Palestinians' expansion in Iqlim al-Tuffah and called on them to withdraw promptly to their nearby refugee camps. But sources from both Shiite factions spoke of a deadlock. In public statements, Amal chieftain Nabih Berri insists on an unconditional withdrawal of Hezbollah from all territories it conquered during the latest round of fighting. Hezbollah has offered a gradual withdrawal, coinciding with negotiations on finding a way for both militias to exist in the region. There was sporadic sniper fire interspersed with blasts from rocket-propelled grenades Thursday, but no casualties were reported.