Prime Minister Menahem Begin today rejected U.S. criticism of new Israeli settlements in occupied Arab territory and Parliament overwhelmingly defeated a motion to prohibit more settlements.

An official of the militant nationalistic organization responsible for the most controversial of the settlements said he expected the government to approve 12 more during this summer.

[PARAGRAPH ILLEGIBLE]

In Washington, President Carter said that he backed the criticism of Israel's settlement policy made by Secretary of State Cyrus Vance yesterday. Vance said the settlements were contrary to international law and an obstacle to peace Carter told reporters."The statement that the Secretary of State made speaks for me."

Prime Minister Begin told the Israeli Parliament that he wanted to express his government's "deep distress and distress and disappointment" at Vance's comments.

The current controversy was touched off by the Israel government's decision yesterday to give permanent legal status to three unauthorized settlements on the occupied West Bank region. Arabs have insisted on the return of captured territories as a prerequisite for a Middle East peace settlement.

Begin said President Carter asked during their talks in Washington last week that Israel refrain from establishing settlements on the West Bank. "But I told them Jews have the inalienable right to live anywhere in the West Bank and the Gaza Strip," the prime minister said.

In both these areas, regarded as having biblical associations with the ancient land of Israel, a large number of Jewish settlements have been established since 1967.

"There is no violation of international law," Begin said. "Israel honors international law. These settlements in no way harm Arabs. We did not evict any Arabs for these three settlements." That was a reference to the settlements given legal sanction yesterday.

Begin announced that the Cabinet had empowered its Ministerial Committee on Settlements "to decide on establishing new settlements" on the West Bank. "Its decisions will be as if taken by the full government," Begin said. But there was no indication in his speech that new Jewish villages would be built immediately.

In Tel Aviv, Zvi Slonim, secretary general of the militant Gush Emunim movement, predicted the government would establish 12 more settlements in the West Bank this summer. Slonim said between 25 and 75 families were ready to move into each of the settlements.

"We very much are expecting this approval," he said. "With all respect to the United States and to the president of the United States, the question of settlements is only an Israeli problme and it isn't the business of anyone else."

Shimon Peres, leader of the opposition Labor Party, said in commenting on the legalization of three settlements that the action "should be an Israeli decision and purely an Israeli decision, but the announcement was done at the wrong time and for no good purpose but for the sake of drama." During its period in office the Labor Party frequently threatened to remove the settlements but never carried this out.

The motion to bar future Jewish settlements in the West Bank won only the two votes of the pro-Palestinian faction that put it before Parliament today.

In the Jordan's capital, Amman, three newspaper decision on the three settlements.

The daily Al Rai, which usually reflects the government view, said the Israeli move was a demonstration of bad faith.

The Jordan Times, an English-language daily, said Israeli recognition of the settlements showed that "Mr. Begin expects any peace talks to ratify the status quo on the West Bank."

Another paper, As Haab, said: "The arrogant Israeli stand is a violation of the basic framework of the Geneva conference and a threat to peace, not only in the Middle East but the whole world." It urged President Carter to define an American Mideast peace plan.

The U.S. government has refrained from setting forth its own plan for the region.