Israeli Defense Minister Yitzhak Rabin yesterday brushed aside U.S. appeals for the use of nonlethal means to curb the current Palestinian unrest in Israeli-occupied territories, saying Israel was determined to show the demonstrators they could not achieve their goals through "the use of public disorder."

State Department spokeswoman Phyllis Oakley said that at a meeting Monday Undersecretary of State Michael H. Armacost had discussed with Rabin U.S. unhappiness over the Israeli use of live ammunition to quell the worst outbreak of unrest in 20 years on the West Bank and Gaza Strip. At least 12 Palestinians have been shot dead.

Oakley said representatives of the U.S. Embassy in Tel Aviv also had raised the U.S. concern with the Israeli government there.

U.S. officials said the administration has asked Israel both to stop using live ammunition and to set up a specially trained police force using nonlethal means to handle demonstrations in the Israeli-occupied areas.

The Israel government has rejected both appeals, they said.

Assistant Secretary of State Richard W. Murphy told a House panel Monday that the Israeli government did not have enough specially trained security forces to deal with what he called the "cycles of violence" occurring in Israeli-occupied territories.

Murphy said there was no evidence yet of any pattern to the violence or indication that local Islamic fundamentalists, or any outside forces, were behind the unrest. He said it appeared to be much more the result of "a spontaneous set of individually prompted actions."

Murphy said "a sense of hopelessness" was setting in among the 1.3 million Palestinians living in the West Bank and Gaza Strip, "a sense that the future is stretching out gray and endless without the prospect of any political resolution of this four-decades-old problem."

"Probably the sense of nationalism grows with each passing year of {Israeli} occupation," he added.

Rabin, appearing yesterday on NBC's "Today" show, said the Israeli military was already using both rubber bullets and tear gas, as U.S. officials have been urging, but added that "whenever it is not sufficient, we are determined to maintain law and order."

Speaking at the Brookings Institution later, Rabin said Israel "would not allow use of public disorder, terror, to show that those who . . . carry them out can achieve their goals by these means."

He conceded that the tough Israeli tactics might be damaging his country's image but that Israel had learned "the hard way" not to give in "to the use of force and to the use of terror."

"We are sorry that we have to use force, but whenever there is a violent demonstration, not a demonstration like here . . . but a violent demonstration using Molotov cocktail bottles, throwing {stones}, setting fire, attacking {car} passengers, blocking roads . . . the border police, police and the military will use whatever is needed to prevent it," he said.

While the Israeli defense minister was speaking, 20 to 30 pro-Palestinians staged a peaceful demonstration outside the building on Massachusetts Avenue.

Despite his tough public statements yesterday, congressional sources said Rabin was much more restrained in private meetings on Capitol Hill Tuesday. They said he appeared to be groping for an answer about how Israel could deal more effectively, and with less bloodshed, with the Palestinian unrest.

As defense minister, Rabin is directly responsible for implementing Israeli policies in the occupied territories because they are under direct military rule. Regular army troops or reservists are mostly used to maintain law and order there.

Rabin suggested during his speech that the Palestinian demonstrations in the occupied territories might be an Arab attempt to refocus attention on the Arab-Israeli conflict at a time when the attention of Arab nations and the world generally was centered on the Iran-Iraq war and the aftermath of the U.S.-Soviet summit here.

But he avoided blaming the Palestinian Liberation Organization (PLO), Iran or radical Shiites for the unrest as some other high Israeli officials, including Prime Minister Yitzhak Shamir, have done.