JERUSALEM, DEC. 27 -- The battle between Palestinians and Israeli soldiers moved into a new arena today: Israel's military justice system in the occupied West Bank and Gaza Strip, with lawyers representing Arab prisoners charging that their clients have been beaten, mistreated and denied fair trials.

Senior Army officials denied the charges and gave an unusually detailed defense of conditions at military prisons in the West Bank. Trials have begun in five military courts of dozens of an estimated 900 to 1,200 Palestinians. Sources said the Army arrested about that many during two weeks of violence in the territories that left at least 21 Arabs dead and 158 injured. Fifty Israelis were also injured, according to Israel's count.

Meanwhile, diplomatic sources said the United States has cautioned Israel against deporting large numbers of Palestinians allegedly involved in the violence. Defense Minister Yitzhak Rabin reportedly is considering the expulsion of 15 to 20 Palestinians from a list submitted by the military.

The Army declared the unrest over, noting that 27,000 West Bank students had returned to 1,200 schools without incident. It also said it had broken up a terrorist ring in the Dehaishe refugee camp outside Bethlehem that had planned to attack tourists with molotov cocktails during the weekend Christmas celebrations there.

Unlike Israeli citizens, Arabs in the occupied areas are subject to military courts whose verdicts cannot be appealed and whose reputation for impartiality has long been questioned by Palestinian and Israeli human rights activists. Conditions in the military prisons in the territories have also long been the subject of controversy here.

Both issues are becoming a battlefront in the propaganda war here, and both came under attack today by lawyers for the arrested Palestinians. Felicia Langer, an Israeli lawyer long active in left-wing causes, said she had filed an appeal in the Israeli Supreme Court last week alleging beatings and brutal conditions at the Ansar II temporary detention center in Gaza City. "The affidavits I have speak of simple but terrible brutality," she told a press conference here.

Gaza lawyer Mohammed Abu Shaaban said 60 to 70 prisoners were being held in Ansar II without proper medical treatment despite wounds or broken limbs. He said up to 175 prisoners were being held in tents despite rainy weather. He and other Gaza lawyers are in the midst of a two-week strike against the military courts, and Shaaban said 40 Gazans were convicted and sentenced last week despite not having legal representation.

West Bank lawyers said they too are considering a boycott. "If we're serving the authorities more than we are serving our clients then we won't do it," said Israeli lawyer Lea Tsemel. "We don't take these courts seriously. Everyone else -- the clients and the judges -- already believe they are just some sort of game."

The Army quickly countered with a briefing for Israeli journalists by Maj. Gen. Amram Mitzna, the West Bank military commander. The Army later issued a statement contending that "every possible effort has been made to preserve the human dignity and civil rights of those detainees awaiting trial."

It said all prisoners in the West Bank were housed in solid, rainproof structures, not in tents, and that requests to see family members, lawyers or International Red Cross representatives were being "speedily processed."

The statement also said that every detainee upon arrival at prison was given a thorough medical examination whose results could be used by a military judge to verify complaints of torture while in detention.

The Army said it had detained about 600 people in the West Bank since the violence began, most of them between the ages of 17 and 27 and all of them male. All young children had been released to the custody of their parents, except for two between 12 and 14 who were being held by special order of Mitzna's legal adviser.

The statement applied only to the West Bank and there was no similar statement issued by the Army command in Gaza. Military sources said they believed conditions there were similar.

The Army has set up three special courts on the West Bank, in Hebron, Ramallah and Tulkarm. Military officials said the object was to accelerate the normal process of prosecution and added that those who pleaded guilty would generally get lighter sentences. Most of those being held are charged with attacking soldiers with molotov cocktails or stones.

In Nablus, 34 cases were heard today, according to sources present. Three people pleaded guilty and received sentences of from 3 to 18 months. The other cases were postponed for a few days to allow lawyers time to see their clients and prepare a defense. Thirteen Palestinians were convicted and sentenced in Gaza, according to Israel radio.

The Army also announced that Mitzna had temporarily suspended from duty a lieutenant on the West Bank after a preliminary investigation determined he had opened fire without adequate cause and wounded two Palestinians last week. Military police are investigating the case.

Israeli radio also reported that the Army is investigating two incidents in Gaza in which young Palestinians were blindfolded and tied atop military vehicles to serve as human shields against rock throwers. One incident was reported by a U.N. refugee worker and the second was filmed by a CBS camera crew. The practice violated military policy, a spokesman said.

Israeli officials consider deportation their harshest weapon against Palestinian activists and contend they use it sparingly. Since a toughened policy was initiated in 1985, the Army says 18 persons have been deported, while Palestinian rights groups put the figure at 44 because they count those expelled after they were released in a 1985 prisoner exchange.

Those expelled have a limited right to appeal, although Israel's high court has never reversed an expulsion order and the Army often succeeds in having evidence kept secret from the defense citing "security reasons."

The United States has opposed deportations as a violation of the Geneva Convention and of due process.

Sources said American diplomats had discussed the matter with Israeli officials and noted that international criticism of Israel, already high because of the tough measures used to quell the rioting, would only increase if deportations were ordered.

The Israelis are also said to be hesitating because lawyers for Palestinians have pledged to battle the orders in court and in the press.

Military officials said no final decision on deportations had been made.