Israel today rejected as "unjustified" the condemnation by the United States of its policy settling Jews on the occupied West Bank of the Jordan River.

Prime Minister Menahem Begin's Cabinet issued a statement after a meeting here declaring that Israel "cannot accept the assertion that the settlement of Jews [in the West Bank] is illegal" and regretting "unjustified remarks" by the State Department.

Begin's government announced last week that it would build three new Jewish settlements on the West Bank, captured from Jordan in the 1967 war, and drew an immediate protest from the Carter administration.

State Department spokesman Hodding Carter III Thursday reaffirmed U.S. opposition to the settlements, saving that "unilateral, illegal acts in territories under Israeli occupation create obstacles to constructive [Middle East peace] negotiations."

Today, following the Israeli Cabinet statement, a State Department spokesman said: "Our statement of last week speaks for itself. We have nothing to add to it."

U.N. Secretary Genenral Kurt Waldheim, meanwhile, expressed "deep regret" over the Israeli decision to create more settlements on the West Bank. Speaking in Tunis on his way to Nigeria for a U.N. sponsored conference on apartheid, he called the new settlements an obstacle to peace in the Middle East and urged that they be reconsidered.

The Israeli statement rebuking the United States was issued as a public opinion poll conducted by the private Mediyin Ezrakhi Institute showed Begin's majority in the 120 - seat Knesset if new elections were held now. The poll said Likud, which won 43 seats in May and now rules with the help of religious parties, would gain 63 seats in any new election.

Israel's long - standing differences with the United States over the settlements have worsened since Begin took office. He says that Jordan never held the West Bank legally under international law, he has legalized three previously unauthorized settlements on the West Bank and he has extended Israeli government services to West Bank Arabs. Critics term his policies "creeping annexation."

In its statement today, the Cabinet said: "The government of Israel reiterates that such settlement does not and shall not constitute in any sense an obstacle to negotiations for peace treaties.

"The government of Israel express its regret over the unjustified remarks made on behalf of the United States by the spokesman of the State Department."