Vietnam yesterday called a report that it had occupied a hill in Chinese territory "sheer fabrication," thus ending its five-day silence on the most serious charge so far in the feud between the two former allies.

The official Vietnam News Agency issued a short statement rejecting reports by Peking that Vietnamese troops and "occupied China's Bonien ridge" and "drug trenches and erected barbed wire around the ridge" on Chinese territory.

"This distortion is aimed at covering up a series of criminal actions. . .against Vietnam by Peking," the agency said.

After a bloody scuffle involving Chinese refugees in the border area last Friday, "Vietnamese armed security forces had to ensure security and order in the Vietnam border areas," Hanoi's statement said. It carefully denied that Vietnamese forces had "occupied" the hill, but seemed to leave open the possibility they had been in Chinese territory at least temporarily.

Analysts here were unable to explain the delay in the response from Hanoi, which had been quick in the past to answer China's charges during their escalating propaganda war. The Chinese have not referred specifically to the occupation since Monday, when the New China News Agency released a detailed description of the alleged entrenched Vietnamese position on the hill. It is not known what the present situation is at the tense border area known as "Friendship Pass."

Peking failed to mention the Bonien Hill occupation in its account of its diplomatic protest to Hanio Wednesday over an alleged Aug. 12 violation of the border by Vietnamese border patrolmen. Some analysts suggested the failure to mention the more recent and more serious occupation, coupled with Vietnam's response, indicated that the Vietnamese were new occupying the hill and that a dangerous clash has been avoided.

Vietnam, meanwhile, released a statement by its army chief of staff, Gen. Van Tien Dung, praised the preparation of the armed forces and warning off all "aggressors."

"Today, ours is no longer a small country but we must nevertheless stand ready to fight against aggressive forces bigger than ourselves," he said, without directly referring to China. The growing tension appears to result in part from China's support for Cambodia in its ongoing, bloody border war with Vietnam.

"We defend our country, we don't invade any other country and we strongly oppose all aggressions," the general said.

In the last several months, more than 160,000 Chinese residents of Vietnam have crossed the border into southern China, escaping what they said was persecution by the Hanoi government. When China, pleading that its refugee relief facilities were overwhelmed, effectively closed the border July 12, refugees began to camp on the Vietnamese side of Friendship Pass.

Last Friday, according to Peking Vietnamses troops and police attacked the refugee camp, forcing more than 2,000 refugees across the border, killing and wounding several refugees, Hanoi said Chinese officials had started the stampede across the border. Then came the Bonien Hill report.

The Vietnam News Agency charged yesterday that China was planning to send "tens of thousands" of refugees in rafts and on secret trails back across the border into Vietnam.

"There are proofs showing that many of . . . the people whom the Chinese authorities plan to send back to Vietnam have been entrusted with the duty of causing trouble, or spying and disturbing Vietnam's security," the agency said.