Menachem Digley leans up against the bar and orders another vodka and ginger ale. The breeze from the ocean catches the hem of his galabiya, the floorlength shirt so popular with Arab men in Northern Africa, and brushes it gently against his bare feet. Above, the palm trees are silhouetted against the clear midnight sky, the moon shines brightly down on the Sinai Desert resort. In the background the only noise which can be heard above the voices of the guests is the record player. It is playing the theme song from "Saturday Night Fever."

"Diklia" or "The Palm Trees" is only five weeks old. It is Menachem Digly's baby. One day he hopes it will be like a Club Mediterranee. Today it is nothing more than a few colorful tents on a deserted beach, an outdoor bar, a makeshift open-air disco dance floor and a grass hut dining area.

Never mind. He has high hopes for it. Or rather, he did until Camp David. Production has already started for new cabanas, bathrooms, a new dining area. Yet "Diklia" is right in the heart of the Sinai Desert, only five minutes from the Yamit settlements which Begin has promised to give back to Egypt. Digly is one of about 4,000 Jews who will likely have to leave, give up their homes, businesses, dreams of a new life.

At the moment Digly is trying to be pragmatic about the whole thing. He figures he is renting the land from the Israelis to start his seaside resort. Why shouldn't he be able to rent the same land from the Egyptians?

"I think Sadat will let us stay," he says. "If he doesn't it will mean he really doesn't mean peace."

This night a group of young soldiers, male and female, have come in from a nearby camp for drinks. Several people from a nearby settlement wander in, as do some young couples from Tel Aviv and two local Arabs. Several Bedouins stay in the background with their camels.

Digly brings out his antigue hand-operated "Master's Voice" Victrola and puts on his favorite records: "Jezebel," "Papa Loves Mambo," "Swanee."

The young soldiers kid with him in a respectful way. Until this July Digly had been an Israeli army colonel, one of the most decorated and highly respected of Israel's fighting men, a veteran of several campaigns against the Arabs.

A friend of his whispers that "some of the things Digly has done would make James Bond blush."

He looks a bit like James Bond, Digly: tall, lean, rugged. His gray hair and lined face seem older than his 41 years, give testimony to the danger and sacrifices of his 22 years as an Israeli soldier.

But Digly is tired. Tired of giving his life to the state, tired of fighting the Arabs.

"I've had enough," he says. "Besides, I don't hate the Arabs. And I love the sea, the sand, the blue sky, the palms, the sun, the atmosphere. It's very relaxed here. All Israel is a big settlement, you know, Before, There was nothing here."

Digly is ready to have some fun, not to mention make some money. Even in its first five weeks "Diklia" has been cleaning up. Without any advertising at all it has been filled every weekend. This weekend if Rosh Hashana, the Jewish new year, then next week Yom Kippur, the day of atonement, and the infant resort is so booked up that Digly is turning away holiday visitors in droves.

"The people in the settlements are very angry about the Camp David agreements," says Menachem Digly, with a knowing smile. "Not because they believe the settlements are necessary for security but because they have a very nice life."

For many Americans, there is this myth - that the settlements in the Sinai are arid little communities stashed in the middle of the burning desert, without a shred of vegetation, under siege from attacks by the Palestinians on the Gaza Strip to the north (which separates the Sinai from Tel Aviv) and by the Eyptians from the south. Without heat or water or other comforts, these Israeli pioneers have sacrificed and struggled to set up a buffer zone in the Sinai, to help insure the security of the rest of Israel from the Arabs.

Not quite.

The Sinai is an undiscovered paradise. The beaches along the coast are generally deserted, uninhabited except for a few Bedouins. The sand is almost pure white and so soft it seems a caress. The sea is brilliant turquoise. The palm trees, in oasis-like groves, yield brilliant scarlet dates. The silence, with no sound but the sea lapping against the shore, is almost hypnotic.

One's first impression upon seeing the endless miles of untouched beauty is to wonder how it has managed to escape the clutches of Conrad Hilton. Why is it not now a wasteland of condominiums? And then one remembers the Sinai Desert's recent history of artillery fire and shifting battle lines. Nobody in his right mind would want to invest in the Sinai. Too much of a risk.

Nobody, that is, except the Israelis. Nothing to lose - they thought. Only now are they beginning to realize just exactly what they are about to lose.

A gold mine.

At the Yamit settlement: Outside The Beach House, a restaurant beach club on the sea, the tourist buses are beginning to pull away. Only a few people are left in the open air restaurant, finishing up their milk shakes, humus, waffles and pitas. The 3 o'clock sun is beginning to make shadows on the beach when Carol Rosenblatt comes out of the kitchen, sinks into a chair and sighs.

Her Yamit T-shirt and white shorts are splattered with cooking oils. Her platinum blond hair is frazzled. She has just fed over 150 people for lunch, among them a whole crew of Hadassah ladies.

Now she can relax and talk, something she has been doing a lot of in the last two weeks. For Carol Rosenblatt has become Ms. Media of the Sinai.

An American from Far Rockaway, N.Y., Rosenblatt, 38, had moved to Miami, divorced, joined a group of American immigrants to Israel in 1972 and arrived here with her three children, "I gave up the American dream for the Zionist dream," she laughs sarcastically.

She had only done secretarial work in the States, and she started doing that three days a week in Beersheva, living in an absorption center near the Sinai until the houses in Yamit were ready.

On the weekend she would pile her kids off to the beach in Yamit and - with a block of ice and a case of soft drinks - she began earning a little extra money selling cokes to the Bedouins living in the shacks nearby.

When Roseblatt go her house in Yamit she met Nati Geko, 28, a young Israeli married to an American woman. He began to build a beach restaurant five minutes from Yamit. When he finished, the two pooled their money and leased the place from the Israeli government. Now Carol Rosenblatt says it's "The beach of the Negev and the Sinai." And Carol Rosenblatt has got the concession sewed up. Or at least she did until Camp David.

Now she may have to move, giving up her profitable business.

She is not happy about it.

"Part of the problem," she says, "is that we're portrayed as a group of settlers with guns. Well, we have beautiful apartments and gardens. It's a real suburbans way of life. The maid [Arab] comes once a week. We have good food, fresh fish, vegetables, fruits.

"There are three beauticians and two cosmeticians in Yamit. We have entertainment, movies once a week and we party, we entertain. The shopping center is like an American mall. The weather is much nicer than Miami and it's full of young people. Plus," she empahsizes, and this is the key, "we're in on the ground floor."

Rosenblatt says that life for single people, especially those with children, has its difficulties. They have the problem of either spending the night with the kids or driving back to Tel Aviv since there are few single men around.

"Every two weeks I go in to Beersheva to spend the night," she laughs.

And speaking Hebrew, she says, is hard too. "When I first came here I dated a Russian, a Spaniard, and a Morroccan and I had more fights because I couldn't say what I wanted to say. Still, she prefers Israeli men and now has an Israeli "boyfriend."

"I've only dated one American and it took him two months to ask me to go to bed with him," she says. "I thought he was queer. I've gotten so used to the Israeli men snapping their fingers and saying 'OK let's go.'"

Regardless of the hardships of finding eligible men and the long hours she puts in at the restaurant, Carol Rosenblatt had decided to stay. She had finally sold her house in Miami and her furniture. And then here parents came. "At first," she says, "they were against my coming. Then after about five visits they just bought a house in Yamit. They decided to retire here. I guess now they won't get their mortgage from the government."

Carol Rosenblatt doesn't mind telling you she's bitter. "I feel that they (the Begin government) have done more damage to Israel than any outside force. I feel they've taken their idealists, their Zionists, the cream of the crop, people who care more about Israel than anybody - and destroyed the ideals of pioneering.

"Personally I feel used. Like a chess pawn by the politicians.

"I don't know how they can watch "The Holocaust" at night and give away the settlements by day."

In fact, Carol Rosenblatt is so bitter that she is thinking seriously about giving up her Isareli citizenship and moving back to the United States. "But not quite yet. The settlements may not have to be evacuated for another couple of years."

Meanwhile Yamit has become, since Camp David, one of the biggest tourist attractions in Israel outside of Jerusalem, especially among the Israelis. So Carol Rosenblatt just might stay a little while longer. The gifts in her club, the beach hats, shirts, sun tan lotion, are doing a big business. "And," she jokes, "I've just raised the price of my ashtrays from $3 to $100.

Nowadays when she greets her guests, she says "Did you just arrive from the north", then adds with just a touch of sarcasm, "Er, I mean from Israel."

As a majority of tourists began to leave the Yamit Beach House, a group of four Arab men came in quietly, and took a table in an unoccupied section of the terrace. They ordered Cokes and began smoking Imperial cigarettes, glancing around as if to taste the place, talking quietly among themselves.

They were reluctant to talk, then agreed - but they put their hands over their eyes when a photographer tried to take their pictures. "No, no," one cried. "This is our first time here. We do not want to be identified."

They were, it turned out, Palestinians from the Gaza Strip who had ventured down to the settlements for the first ime to check out what would eventually be Arab territory.

"We have no feelings about the Jewish people," said one of them, a headmaster of a girls' school. "We do not hate them. They are people like us. But we want some rights. We want a government. If Camp David gives us our rights, then it is good. We are hurt by this occupation. We eat, we work, but this is no life."

What he didn't say as he looked around approvingly at the Yamit setup was what was obvious: This is the life."

Tomorrow: The older Sinai settlements