MOSCOW (AP) _ The Kremlin is bracing for massive protests expected in the Soviet Baltic on Sunday, with the official media accusing Westerners of smuggling in propaganda and inciting people with lies.

Activists predict thousands will gather in Baltic capitals to mark the 48th anniversary of the non-aggression pact between Germany and the U.S.S.R. that cleared the way for the Soviet takeover of the republics of Lavtia, Lithuania and Estonia.

Moscow's response to the demonstrations, which would be the second such protests in the Baltic this summer, is likely to be carefully watched by the West as a further test of Mikhail Gorbachev's policy of ''glasnost,'' under which limited criticism has been permitted.

A group of 20 U.S. senators has already sent a letter to the Soviet leader via the Soviet embassy in Washinton calling on Moscow not to interfere in the demonstrations.

But the Soviet media has taken the offensive, representing the protest organizers as ''foreign falsifiers'' and ''bourgeois outsiders.''

The official news agency Tass accused the West of ''interference in the internal affairs of the Baltic peoples,'' and noted that the expected rallies have been mentioned here on Russian-language reports on foreign radio stations,

The daily Pravda said the Voice of America and the British Broadcasting Corp., were ''providing detailed instructions about what street and at what hour these demonstrations should take place.''

''One of the principal roles has been given to the CIA, which has been coordinating subversive activities and fabricating all kinds of mendacious pamphlets and leaflets smuggled into the Soviet Baltic region through agents,'' Tass said in one of dozens of reports on the subject issued in recent days.

Similar reports were carried by most Soviet newspapers and the evening television news ''Vremya.''

In a demonstration June 14, a crowd in 5,000 rallied in the port city of Riga in what organizers said was the biggest unauthorized protest since World War II in the Latvian republic.

The rally was to commemorate the 15,000 Baltic citizens deported to Siberia under Josef Stalin's reign two years after the Red Army moved in. Eleven people were arrested, but police did not break up the demonstration.

Since then, Soviet authoriites have allowed the most visible Baltic activisits to emigrate or forced them into exile over the last few months in what was seen by some activisits as an effort to still voices of dissent in the region.

Among those who left was Rolands Silaraups, a 21-year-old machinist who was one of the leaders of the June demonstration.