Despite continuing tribal clashes, the South African government reaffirmed today its intention to place the 120,000 residents of Moutse under the rule of a rival tribe as part of its policy of creating nominally independent tribal homelands.

At least 20 persons, including two black police officers, have been killed in the fighting between Moutse's residents, members of the Pedi tribe, and neighboring Ndebeles. Moutse is 100 miles northeast of here.

Chris Heunis, the minister for constitutional development and planning, said in the government's first reaction to the bloodshed in Moutse this week that the district's Pedi residents have a choice: They must either accept incorporation into the neighboring Ndebele tribal homeland, KwaNdebele, or move out of the area and into the Pedis' own homeland nearby, Lebowa.

Moutse residents should end their opposition and begin negotiating the terms for their incorporation into KwaNdebele, Heunis said, because Pretoria will not change its decision to annex the district to KwaNdebele before it becomes nominally independent later this year.

"The South African government has over a long period of time considered the matter with the greatest understanding and compassion," Heunis said in a statement from Cape Town, "and it has concluded that, after all the factors had been thoroughly considered, it would be in the interests of all concerned that the area be included in the territory of KwaNdebele."

Those Pedis not wanting to live in KwaNdebele, Heunis said, will be moved out of the area, where their tribe has lived for more than two centuries, and be resettled about 55 miles to the north on land being given to Lebowa.

Although Heunis had declared earlier that the South African Parliament would review the whole controversy, which goes back more than six years, he made it clear in his statement that the government considers its decision final.

Heunis' statement brought new warnings from Moutse that further fighting is inevitable. The government decision, according to Moutse leaders, will embolden the vigilantes of KwaNdebele, about 1,000 of whom are now gathered, armed and ready to attack, around the district's borders, and will stiffen resistance by Moutse residents supported by Pedi tribesmen from other areas.

"The government decision not to reconsider will be recorded by history as one of those fateful and fatal moves that caused a war," Maredi Chueu, who represents Moutse in the Lebowa legislative assembly, commented, "because that is what is now beginning -- a full-scale war."

The South African police, meanwhile, denied charges by Chueu and other Moutse political leaders that they were ignoring attacks on the district's residents by heavily armed vigilantes from neighboring KwaNdebele attempting to force Moutse to accept incorporation.

"The police are striving to contain the unrest and lawlessness in the area," police headquarters in Pretoria said in a statement, noting that two of its constables, both black, had been killed in the area this week.

In Port Elizabeth, police banned a memorial service, scheduled for Saturday in the center of the city, for Molly Blackburn, a white civil rights campaigner who was killed in a weekend auto accident.