The conflict between residents of the Marshall Islands and the U.S. government about use of Kwajalein Atoll in the Pacific island chain as an American strategic missile impact range continues to escalate. On Sept. 30, the U.S. lease on the atoll will expire.

President Amata Kabua of the home-rule government of the Marshalls, a U.S. trusteeship, is meeting an American delegation in Hawaii to try to negotiate an agreement to increase Marshallese income from the multibillion-dollar U.S. military facility.

But Pentagon officials oppose paying increased rent and want Kabua to end a two-month protest by Marshallese owners of islands comprising the atoll, which is the target of U.S. intercontinental ballistic missiles (ICBMs) test-fired from Vandenburg Air Force Base in California.

The Pentagon has retaliated and increased pressure on the Marshallese to settle by withholding its final $2.1 million rental payment for fiscal 1982 which ends Sept. 30. Earlier, the U.S. base commander on Kwajalein cut off food packages to Marshallese on the atoll and turned off water for toilet facilities used by protesters until his action was overruled by a judge here.

Several hundred Marshallese men, women and children have "sailed in" and occupied islands on the atoll that they own but have been prohibited from occupying since the U.S. military began using the area as a missile impact range.

According to their leaders, the protesters want to increase annual U.S. rent from $9 million to $16 million. They also want an additional $200 million for the last 20 years' use.

The unarmed warheads of most U.S. land-based ICBMs test-launched from Vandenburg travel about 4,200 miles before landing in Kwajalein's lagoon.

On many of the atoll's islands, the United States has built giant, advanced radar systems and other monitoring devices that gather information from incoming missiles and their warheads. Missile launch facilities for testing proposed antiballistic-missile devices also are located on islands in the atoll.

The test firing of one missile from Vandenburg was briefly delayed last month when protesting islanders drove motorboats into Kwajalein's lagoon where the warheads were supposed to land, according to a Pentagon official. Another missile shot is scheduled for tomorrow, and the Air Force plans to begin testing the new MX missile in January.

In addition to withholding a rental payment in July, the Pentagon last week informed Kabua by cable that banking and warehouse facilities on Kwajalein used by Marshallese businessmen would be closed Sept. 30 when the lease expires.

About 2,000 Americans who work on the missile range live with their families on Kwajalein, the atoll's largest island which is equipped with modern office and laboratory buildings, a hotel, commercial airport, golf course and recreational facilities.

Two miles away across water, about 7,000 Marshallese live on Ebeye, a 65-acre island with unpaved streets, an open burning dump and polluted water. All of Ebeye's fresh water must be shipped from Kwajalein.

Marshallese work on Kwajalein but must return to Ebeye to their residences. Many of the Marshallese have always lived on the atoll, but they have been joined there by others from the islands' population of about 35,000 because of the high salaries Marshallese workers get at the U.S. base on Kwajalein.

In last week's cable to Kabua, Noel C. Koch, principal deputy assistant secretary of defense for international security affairs, said the planned cutoff of access to U.S. banking and warehouse facilities grew out of "concern over the potential dependency upon U.S. sources and the resultant negative effect upon independent development of Marshallese capabilities."

A Pentagon source said the Marshallese were told two years ago to begin building their own banking and warehouse facilities on Ebeye.

In his response, Kabua urged Koch to delay the action, saying it would be impossible to create needed facilities on such short notice. "Your action will, in light of the current sit-in, be viewed as a punitive action and may destabilize the situation in Kwajalein," Kabua added.

According to Pentagon sources, Kabua asked to meet with U.S. officials in Hawaii to present a proposal calling for legal condemnation of Kwajalein Atoll by the Marshallese government and its subsequent rental to the United States. The price to be paid by the United States to owners of atoll islands would be set by Marshallese courts, according to this account of Kabua's proposal.