KARACHI, Pakistan, Feb. 2 —Two Kashmiri youths who hijacked an Indian Airlines plane from Indian Kashmir on Saturday blew up the plane at Lahore airport today.

The plane was destroyed following India's rejection yesterday of a demand of the hijackers that 36 political prisoners in Indian Kashmir be released.

The airliner was blown up apparently with hand grenades. The hijackers prevented fire engines from approaching the burning plane and later surrendered to the police.