The Reagan administration, seeking to encourage the trend toward reduced violence in Israeli-occupied Arab territories, yesterday muted its previously sharp criticism of the Israeli military crackdown that has resulted in the death of at least 23 Palestinians.

U.S. and Israeli officials, speaking privately, said there still are sharp differences between the two governments over the wisdom of Israel's tactics and its effects on the Arab-Israeli peace process and world opinion.

But, the officials added, Washington recognizes that despite Prime Minister Yitzhak Shamir's public rejection of U.S. protests, Israel has heeded American calls in recent days by putting its troops under greater restraint and has dealt with Palestinian demonstrators by using mostly nonlethal methods such as rubber bullets, tear gas and protective shields.

State Department spokesman Charles E. Redman, while refusing to say that Israel was following U.S. suggestions, acknowledged that "there seems to be some evidence" of a more moderate Israeli approach. "Overall we've seen a general lessening of violence and that we welcome," he said.

But the Israeli government's announcement Sunday that it intends to deport nine Palestinians from the West Bank and Gaza Strip is strongly opposed by the United States, sources said. Israel justifies the expulsions on the grounds that the nine are agents of the Palestine Liberation Organization or Moslem fundamentalist groups and helped agitate the unrest in the territories that have been under Israeli occupation since 1967.

However, sources on both sides said that Israel, while unwilling to renounce the potent threat of expulsions, privately has reminded the United States that deportation orders are subject to a lengthy legal appeals process. As one Israeli source put it, "The Americans have taken a wait-and-see attitude about whether we actually expel these people or use the threat of deportation as a means of making them behave."

One U.S. official summed up the administration's position by saying, "We've made unmistakably clear by our statements over the past three weeks that we thought Israel was making a big mistake. They know how we feel, and the signs now are that they've started to respond to our concerns. To keep yelling at them would be counterproductive and do nothing to encourage the trend toward calming things down on the West Bank and in Gaza."

Still, the official acknowledged, the change in Israeli behavior at best amounts to "treating the symptom" rather than finding a solution to the frustrations building up among the Palestinian inhabitants of the territories after 20 years of Israeli rule.

Other U.S. officials agreed that there is some justification to Israeli charges that the unrest was fanned by radical Palestinians with an implacable hatred of the Jewish state. But they said the demonstrations appeared, at least initially, to result from despair over failure to launch meaningful peace talks on the fu0ure of the occupied territories.

All leaders of Israel's coalition government say that they favor negotiations with Jordan's King Hussein, but are divided over how the talks should be held.

Shamir and his conservative Likud bloc have rejected Hussein's demand that his participation be given legitimacy in the Arab world by holding the talks within the framework of an international conference.

The idea of using such a conference as an umbrella for direct talks between Israel and a Jordanian-Palestinian delegation was worked out in collaboration with Israeli Foreign Minister Shimon Peres, leader of the Labor Party within the coalition.

Such a conference has been endorsed by the Reagan administration. However, the United States has taken the position that no practical movement toward peace talks can be made as long as Israel is unable to resolve the dispute between Shamir and Peres.

While the stalemate continues, U.S. officials said, the frustration level in the territories increases. That frustration is exacerbated by Israel's resort to tough crackdown measures that, in the U.S. view, only increase tensions and give the PLO and radical Arab states an incentive to prolong the conflict by portraying Israel before the rest of the world as a brutal and oppressive occupying power.

In fact, some U.S. officials said they fear that new riots and tension can be expected in the months ahead because the U.S. election campaign makes unlikely any new efforts to get the peace process moving.