Israel said today that within the next year it will build or expand 20 more settlements in the occupied territories. The announcement, coming a day after the United States sharply criticized earlier Israeli plans for expansion of settlements, appeared likely to cause more friction with the Reagan administration, which has called for a freeze on Israeli development of the West Bank.

The state-run Israeli radio quoted Deputy Agriculture Minister Michal Dekel as saying the 20 settlements are part of a government master plan calling for an additional 37 new settlements that by 1985 would add 80,000 Jews to the 25,000 settlers already in the territories.

A senior Foreign Ministry official said he saw no reason for the renewed U.S. criticism of Israel's settlements policy voiced yesterday by the White House and the State Department.

"The United States, and even President Reagan on a number of occasions, has mentioned that it recognizes the right of Jews to live anywhere, and certainly in their own homeland," said Deputy Foreign Minister Yehuda Ben-Meir.

"So there is no reason now for any reaction. There is nothing new in this policy that has been going on for years. We are continuing to settle Jews in Judea and Samaria the Biblical names for the West Bank on land which is not privately owned, which is not tilled and which in no way affects the rights of the Palestinians living there."

Ben-Meir added that he is certain Reagan does not really expect Israel to change its settlements policy.

The president asked for a freeze on Jewish settlements in September when he unveiled his Middle East peace initiative, which calls for the West Bank and Gaza eventually to be linked to Jordan. Prime Minister Menachem Begin rejected the freeze proposal and the entire peace plan, underscoring his opposition by approving the announcement of three new settlements less than a week after Reagan's request.

The latest dispute over the settlements issue was set off earlier this week by Deputy Prime Minister David Levy, who is also the government's housing minister. Speaking at a new settlement near Ramallah, Levy said five additional Jewish communities would soon be established in the area. These five are among the 20 settlements mentioned today by Dekel.

Levy's announcement provoked a sharp reaction in Washington, where administration officials said the new settlements were "most unwelcome" and raised questions about Israel's adherence to a key U.N. Security Council resolution that calls for the return of occupied territory as part of an Arab peace settlement with the Jewish state.

Two factors, one domestic and the other international, appear to be behind Levy's initial statement and the Begin government's strong retort today to the ensuing American criticism.

The first was the leak earlier this week to Israeli radio accusing Moshe Arens, Israel's ambassador to the United States, of having advocated a six-month settlement freeze as a response to the Reagan peace plan. The report, which was later amended here to say that Arens had not proposed an overall freeze but had urged the government not to announce the new settlements immediately after the Reagan initiative, led to sharp criticism of the ambassador in Israel.

It also put the Begin government under domestic pressure from its own right wing to demonstrate that it is not wavering in its commitment to continue an aggressive Jewish settlement policy in the West Bank and eventually to incorporate the territory into Israel proper.

There is widespread speculation among Israeli journalists that the accusation against Arens was leaked to Israeli radio by aides to Defense Minister Ariel Sharon, who is under fire because of the Beirut massacre of Palestinian refugees and sees the hawkish Arens as a potential political rival and possible successor if he is forced to resign.

The international factor is Begin's planned trip to the United States later this month and his scheduled Nov. 19 meeting with the president at the White House. Begin reportedly expects Reagan to renew his call for a settlement freeze during their talks.

U.N. officials said the 15 Security Council members would meet behind closed doors Monday to debate Israel's policy of establishing settlements in occupied territory, Reuter reported. Morocco had called for the session on behalf of the group of Arab states. An open session could follow, U.N. officials said.

By this week's flurry of statements, beginning with Levy's announcement Wednesday night, Begin appears to have signaled in advance that the question of a freeze remains a closed subject to him.

Israel's system for approving and establishing new settlements is a complex and baffling process involving both governmental and nongovernmental agencies. Some settlements appear to have been announced as "new" several times during the process, making it virtually impossible to determine whether a particular settlement was previously authorized or not.

The system, however, allows the government to announce a step up in settlement activity whenever it is convenient, as it was after the Reagan initiative and again this week.

In another development today, Israeli officials derided a suggestion by Jordan's King Hussein that the Palestine Liberation Organization recognize Israel's right to exist as a means of fostering the Middle East peace process. Hussein made the suggestion in an interview with the British Broadcasting Corp., but Israeli officials were quick to point out that Jordan has no official relations with Israel.

"He seems to be guided by a very strange logic," one official said. "He advises the PLO to recognize Israel, but he doesn't himself. It would be well if he would recognize us and then advise others what to do."