Three words uttered by a U.S. government official yesterday will be news headlines all over the Middle East this morning despite the fact that the State Department insisted that they say nothing new.

The words "an impractical demand" appeared in a statement made by State Department spokesman John Hughes defending a U.S. veto Tuesday of a U.N. Security Council resolution that said that Israeli settlements in the occupied West Bank of the Jordan "have no legal validity" and are a "major and serious obstruction to peace." The phrase referred to Arab calls for the dismantling of Israeli settlements.

The Arab-backed resolution would have imposed sanctions against Israel if it refused to dismantle existing settlements in occupied territories.

The three words sent Arab and Israeli reporters into a flurry of excitement, apparently because of the impression that a significant shift in U.S. policy was taking place before their eyes. Spokesman Hughes was subjected to a barrage of requests for clarification of the statement.

The U.S. statement said: "We share the anguish of decent people everywhere about the loss of life and destruction of property the West Bank has witnessed in recent weeks."

Hughes was referring to last week's killing of three Arabs by masked gunmen in Hebron, and the killing of a Jewish student and other acts of violence, but said the U.N. resolution was inadequate because it mentioned only the killing of the Arabs.

The spokesman said that the proposed resolution contained other unacceptable elements, including the unfounded implication that Israel was expelling the Arab population from the occupied territories. "Moreover," he said, "it called for the dismantling of the existing settlements, an impractical demand." Hughes insisted repeatedly that the language was not a departure from President Reagan's Sept. 1, 1982, call for a freeze on existing Israeli settlements and subsequent statements that further settlements in occupied territories are an obstacle to the Middle East peace process.

State clarified the matter later: "It was not intended as a reformulation of existing U.S. policy on settlements. Our position is that the subject of settlements is too complicated to be addressed in the context of a U.N. resolution."