The Washington Teachers' Union rejected yesterday a fact-finder's recommendations for settling its bitter contract dispute with the D.C. school board, increasing the possibility of a teachers' strike that may prevent the opening of the city's schools Sept. 10.

William Simons, president of the union, said the recommendations "need refinement" before the union can consider them. Without a signed contract, he said, the city's 6,000 teachers, who struck the schools for 17 days in March, will strike again.

Simons called the action of the school board in accepting the recommendations with one reservation Monday "a positive step in resolving differences" between the board and the union.

"Therefore the union is prepared to enter into further negotiations with the board, using the fact-finder's report as a basis for resolving the outstanding issues," Simons said yesterday in a prepared statement. He declined to detail just what he sees as the "outstanding issues."

Simons suggested that a strike might be avoided if the school board agrees to sign a temporary memorandum of understanding in lieu of a contract. The memorandum would include all issues on which the two sides have reached agreement so far and would cover all other contract articles with provisions of the old teachers' contract that expired July 31.

That suggestion met a lukewarm response from one school official.

"Any kind of memorandum would be premature at this point," said George Margolies, legal counsel to school superintendent Vincent E. Reed. "There is plenty of time to reach an agreement before school starts . . . If the union sees what the board has done as a positive step, then they should reciprocate in kind . . . "

"That is something they'll have to decide on their own," Simons said in discussing his proposal for a memorandum. "We are, of course, submitting a proposal to them and we hope it will be given serious consideration.'

"I cannot believe that they would hold their teachers hostage after we have gone to the point of having a fact-finder's report that is favorable to the union in all items put forth," she said. "I don't understand what they want. The only area the board got a favorable ruling from the fact-finger was on minor personnel items."

"I am not at all surprised," said Bettie G. Benjamin, board member from Ward 5, "I had hoped that the union would act reasonably and accept it, but I'm not surprised. It is the nature of one who bargains to find out what else they may gain . . . It would not have been throwing in the towel for either side to agree to the fact-finder's report. It was equitable and fair to both sides."

Simon's statement issued yesterday said in part that "the union is not interested in taking an action which would delay the opening of school. The union is, however, interested in providing its members with the basic protection which will allow them to return to school without fear of harassment or intimidation. Therefore, the union is prepared to enter into further negotiations with the board using the fact-finder's report as a basis for resolving the outstanding issues."

After reading the statement from his hotel room in a Pennsylvania resort where the union is studying the report, Simons said the fact-finder split the issues in dispute between board and union down the middle, giving the board half of what it wants and the union half of what it wants.

"Some areas are not clear and other areas we have growing concerns with, concerns that I am not ready to spell out," Simons said.

Simons did indicate, however, that fact-finder proposed compromises such as a no-strike clause and a provision dealing with teacher evaluation procedures will meet union opposition in future negotiations.

As proposed by the fact-finder, James M. Harkless, the no-strike clause would allow the school board to fire any teacher who "participates in, supports, or encourages any slowdown, strike or work stoppage . . ."

The evaluation procedure is the Teacher Appraisal Process (TAP) that the school system and the union developed jointly in 1978. The union has since become concerned that school principals and administrators are using the procedure unfairly against teachers they feel they do not like.

But the fact-finder ruled that nothing in the new contract should allow teachers to question whether administrators use the TAP fairly. The only challenge a teacher could make to an unsatisfactory rating, the fact-finder ruled, would be to prove that the TAP procedure was violated.

On several other issues, however, the union appeared to be a clear winner: The fact-finder, for example, ruled that the board should withdraw its controversial proposals to lengthen the teachers' school day and the school year. The board has said it wanted to make teachers work harder to raise the test scores of the city's public school students, which are among the nation's lowest.

The fact-finder told the board to wait until 1980 to raise the issue of a longer day and year because the board should have the authority by then to raise teachers' salaries.

On Monday when the board voted to accept the fact-finder's recommendation, they appended to their acceptance a suggestion that either the board or the union could reopen negotiations on salaries or the length of the school year and the teachers' workday within 30 to 60 days after the city begins its new personnel regulations.Those regulations allow the board to set teachers' salaries.

Simons said yesterday that questions about the eventual disposition of court fines against the union for its March strike and threats by school superintendent Reed to fire teachers who were violent or intimidated other teachers at the time did not enter into the decision to reject the fact-finders' recommendations.