The Southwest Africa People's Organization SWAPO charged in a report released here yesterday that the practice of torturing blacks under arrest has became "institutionalized" throughout the South African-administered territory of Namibia (Southwest Africa).

The release of the report, based on a study of recent allegations of torture, apparently was timed to the opening of talks in New York this week on independence for the territory, which South Africa administers in defiance of U.N. directives.

In another development, South African officials said last night that their troops crossed into Angola from Namibia in pursuit of SWAPO guerrillas and killed 18. It was the first time since October that South Africa has acknowledge pursuing SWAPO guerrillas into Angola.

The South African commander in Windhoek, the Namibian capital, said his forces pursued the guerrillas "after three South African soldiers, two of them black, had been wounded during the terrorist action."

In the New York talks, which began Thursday, five Western countries - the United States, Canada, France, Britain and West Germany - are meeting with South Africa and SWAPO.

The Western countries have drawn up a compromise plan to break the deadlock between South Africa and SWAPO over arrangements for granting independence to Namibia by the end of this year.

The report released here by SWAPO yesterday contains 10 affidavits by blacks who said they had been tortured by South African army or police at an army camp in Oshkati in northern Namibia.

The affidavits were publicized in December when they were submitted in a court case in Namibia in an effort to win the release of another jailed black.

The report, a 62-page booklet entitled "Torture - A Cancer in Our Society," was written by the Rev. Heinz Hunke, a Roman Catholic priest, and J. J. Ellis, a member of a Christian Center in Windhoek.

The two churchmen say in the introduction that the practice of torture has not only become institutionalized in Namibia but is proliferating, particularly among blacks arrested under the South African Terrorism Act.

They add, "Torture is not only applied to political suspects but also to those suspected of an ordinary misdeed, like minor theft."

The report contains a reply to a letter Hunke wrote to Justice M. J. Steyn, administrator general of Namibia, in which the priest alerted him in September to increasing torture by the army and police in Namibia.

In his response, Steyn said he was satisfied that "there is no substance" to Hunke's allegations that torture has become institutionalized and added that "I will never tolerate or condone the infliction of unlawful violence upon anybody".

Steyn admitted that "Individual instances of detainees or prisoners being assaulted or tortured will unfortunately occur from time to time, human nature being what it is."

Then 10 sworn statements all allege that South African security police deliberately and systematically inflicted torture on the individuals concerned to obtain information and force confessions regarding their contacts with SWAPO.

The statements described in great detail how the prisoners were allegedly tortured by the use of electric shocks, with the devices often attached to sexual organs.

The report also includes affidavits from several Windhoek doctors who examined the blacks after their release from detention and found marks on their bodies to substantiate their allegations of torture.

"Those who oppose the [South African] regime and its inhuman treatment are being flogged, tortured with electric shocks and detained for long periods without trial under the most appalling conditions," SWAPO said in releasing the report.

SWAPO said the report had been banned in Namibia and South Africa.

In the past few months, the mineral-rich territory has become the scene of increasing violence and clashes between the South African security forces with SWAPO guerrillas infiltrating from Angola.

Wednesday, a gunman shot and killed the health minister of Ovambo, a northern province, at a political meeting. South Africa accused SWAPO of being responsible.

A SWAPO spokesman here denied the charge but warned "those collaborating with the racist regime that they are bound to meet the same fate."