The Pentagon plans to continue firing its intercontinental ballistic missiles at Kwajalein Atoll, despite the presence of Marshall Islanders camped out on islands near the target zone.

The islanders are protesting the agreement under which the United States has use of their lands.

A top Defense Department official yesterday called the 10-day-old "sail-in" by Kwajalein landowners illegal and added, "There is no way they will shut down the operation [of the Kwajalein Missile Range] by occupying these islands." He said another shot was already scheduled, but did not give the date.

Intercontinental ballistic missiles are fired from Vandenberg Air Force Base, Calif., and their unarmed warheads land for the most part in the lagoon of Kwajalein Atoll, 4,200 miles away.

Test equipment and radars on islands surrounding the lagoon track the missile and warheads, providing information on their performance and also aiding in research on anti-ballistic-missile system prototype equipment also installed there.

Kwajalein landowners, led by the three elected members of the Marshall Islands legislature, have expanded the 10-day-old sail-in, according to a Washington spokesman, by placing more than 400 persons on two of the atoll's large islands and several smaller ones, the latter in a corridor that traditionally must be cleared for missile tests.

With protestors on the islands, the Air Force fired a Minuteman III test last Tuesday, but its three warheads fell into the Pacific Ocean north of the atoll.

A protest spokesman said the shot was altered so that none of the Marshallese would be hit accidentally; but a public affairs officer for the Strategic Air Command said yesterday that the target for that shot had always been the open ocean.

The landowners are trying to repeat their success of three years ago when the Air Force had to delay a missile test during a similar six-week sail-in and the Carter administration eventually acceded to the islanders' demand for a sharply increased payment for their atoll.

Lawyers for the landowners say additional rental funds are still needed to meet the mounting public-works needs on Ebeye Island, the only one of the atoll's 90 islands where Marshallese are permitted to live. Some 6,000 islanders are packed onto 64 acres, drawn there by the wages for work on the missile range and the Marshallese tradition that one family member can move in freely with any other.

A Defense Department official said yesterday, with some irritation, that "the precise objective of the protesters is not clear. . . . Some don't like the interim use agreement, some don't like the free-association compact [and] some don't like using the range to test vehicles that will carry nuclear warheads." #TThe interim use agreement sets the $9 million annual fee for Kwajalein, and the compact establishes the future governmental relationship between the Marshall Islands and the United States. As for the final point, officials said, it could have been added to the demands as a way for some of the Kwajalein people "to take part in the antinuclear movement." A group from the National Council of Churches was recently in the Marshalls, urging the people to join the antinuclear movement.

While the situation is more complex than in 1979 because the Kwajalein lease has become entangled in Marshall Island economic interest and politics, the need for Kwajalein has never been stronger, with testing of the new MX missile just six months away.

In the past few years the United States has poured millions of dollars into the new Marshall Islands government and, pressured by Congress, ordered an audit. In turn, the new Marshall Islands government has given $15 million in rental money to Kwajalein landowners the past three years, and those funds are being audited.

Relations between the Kwajalein people and Marshallese President Amata Kabua have never been close. They became more strained when Kabua's negotiator signed up Kwajalein for 50 more years of U.S. use as part of the agreement changing the Marshalls' status from a trust territory of the United States to one of "free association."

Ataji Balos, chairman of the board of the Kwajalein landowners' group, resigned from Kabua's cabinet to lead the protests against the agreement.