A key Israeli parliamentary committee added fuel today to the controversy over the future of Jewish settlements located in occupied Arab territory by approving establishment of three new settlements on the West Bank.

The decision by the Knesset's Foreign Affairs and Security Committee, which also retroactively approved creation of a four settlement established several weeks ago, appeared certain to draw new Egyptian protests.

The question of the future of the settlements has become, after the Palestinian issue, the most troublesome problem in Egyptian-Israeli peace negotiations.

Israel, which has established about 90 Jewish settlements in the Arab territory it seized in the June 1967 war, insists that they must be allowed to remain in place as part of a Middle East settlement.

Egypt, which appears to have been hardening its stance on this question since it became a major public issue, now argues that all of the Israeli settlements must be dismantled and abandoned.

The future of the settlements has also become the subject of a major domestic debate within Israel. It pits those who oppose new settlements and the expansion of existing ones, on the grounds that this will harm the prospects for peace, against those who favor populating the occupied territories with Israelis as quickly as possible to strengthen the country's position.

With today's action, Israel again chose a middle course between the pro-settlement extreme, led by Agricultural Minister Ariel Sharon, and those who would halt Israeli expansion at least for the time being.

Sharon had advocated a grand scheme to establish 25,000 News housing units on the West Bank. Instead he received permission only to set up the three new settlements and to legitimize one existing settlement in Samaria.

Ironically, the Gush Emunim (Faith Bloc) today admitted that if the government wanted new settlements in the West Bank, it would have to find the people to populate them.

The Gush has been the most extreme group in Israel advocating Jewish settlements among the heavily populated Arab areas of the West Bank, and heretofore had given the impression that thousands of zealots were ready to pour onto the West Bank to settle the land.

Informed observers have always contended that the Gush's estimates of the number of people willing to move into the arab territories-was an illusion, and today, Gershon Shafat, political secretary of the movement, admitted that the Gush had all it could do to "strengthen" its existing settlements without trying to set up new ones. He accused the government of not giving enough support to settlements on the West Bank.

The issue of the new West Bank settlements came before the Knesset committee today only because the Democratic Movement for Change (DMC), which joined the government coalition in October, challenged Sunday's decision by Prime Minister Menahem Begin's Cabinet to approve them.

Under the terms of their coalition agreement, the DMC has the right to challenge any Cabinet decision concerning settlements in occupied territories.

The DMC, as a party, is against expanding Jewish settlements -- especially now on the eve of negotiations for peace. Meir Amit a DMC member and Minister of Transportation, said today that the timing of the decision could not have been worse.

The challenge was a failure, however, as the Cabinet's decision was upheld by the committee on a vote of 14 to 9. One of the three DMC members on the committee voted with the government, leaving only two DMC members and opposition Labor Party deputies in opposition.

It was known that some of the ruling Likud members on the committee had their doubts about the wisdom of setting up new settlements. Nevertheless, when it came to a vote, they went along with the party position.

One important issue that surfaced in today's debate was the charge that the government has been less than truthful in its constant claim that no Arab lands have been confiscated to make way for Israeli settlements. The government has insisted that the settlers have been permitted to live only on public lands, or within army camps. It now appears, however, that the army has been expropriating land and then turning it over to civilians.

Committee member Shmuel Toledano of the DMC, an expert on Arab affairs, said Sharon should not hide behind the claim that no private lands had been seized for settlements when the Israeli Defense Force was taking the land for the settlers.

In another development, Prime Minister Begin said today there was no basis for reports -- eminating from Washington and elsewhere that Israel was contemplating giving up territory in the Negev Desert -- within Israel proper -- in exchange for the territory where it has established settlements in the Sinai. He did not, however, rule out this proposition as a subject for discussion when political talks at the foreign minister level open in Jerusalem on Monday.

In preparation for those talks, an advance party of 18 Egyptian technicians and security personnel arrived at Ben Gurion Airport today aboard an Egypt air jetliner.

The Egyptians went to Jerusalem to take up residence in the 21-story Jerusalem Hilton hotel, the conference center, where their delegation will occupy the 17th to the 21st floors of the hotel.

The United States and the United Nations will also participate in the Jerusalem talks, and Secretary of State Cyrus R. Vance is scheduled to arrive Sunday. Officials said he probably will leave three days later but may stay longer if his mediation is required.

Vance is expected to urge Israel not to establish new settlements in Sinai, and spokesman Hodding Carter said in Washington: "Quite frankly, we think this issue can be resolved in the discussions."

Egyptian officials, however, made it clear that they feel the question of the settlements should be handled in the military talks between Israeli and Egyptian defense ministers which will open in a Cairro suburb Wednesday.

Washington Post correspondent Thomas W. Lippman, reporting from Cairo, said the Egyptians are anxious to deal with the issue in the military rather than political talks to make it clear they feel the question is not whether the settlements should be dismantled -- but when and how.

Meanwhile, it was announced that Israeli Defense Minister Ezer Weizman, who will head the Israeli delegation to the Cairo talks, would first fly to Aswan Wednesday to confer with Egyptian President Anwar Sadat.

The Israeli government radio said Weizman would be flown to Sadat's Nile River retreat aboard the Egyptian president's private plane.