The way the secretary of state described the evening, it was Washington in a nutshell.

"I find it hard to look at the faces in this room of people who could spend such a harmonious evening together and could create so many problems," said Edmund M. Muskie at a farewell dinner in his honor last night.

It wasn't necessary to mention any names because as one guest put it, "It was a cozy Washington party" that included the ambassadors of the Soviet Union, Israel and Egypt, among other diplomats present, along with a sizable turnout of Muskie's former Republicans and Democratic colleagues on the Hill.

"Everybody came," said host Jack Coopersmith. Tables were hastily set up in the entrance hall to accommodate the overflowing crowd. When one guest commented to Sen. Alan Cranston (D-Calif.) that it said something about Ed Muskie, Cranston grinned and added "and about Esther" Coopersmith, the tireless political hostess and fund-raiser extraordinaire whome Jimmy Carter rewarded last year by naming her the public member of the U.S. delegation to the United Nations.

But it was clearly Ed Muskie's night. And if the accolades heaped upon him were imbued with regret over his impending departure, Muskie would have had his audience believe otherwise.

"Nobody on this whole planet was more surprised than I to be selected," he said in that familiar down-East accent, "and I have no sense of disappointment about leaving. How can you be desappointed about something you never expected to get?"

Eloquently, the former senator from Maine whom Carter appointed secretary of state barely nine months ago had to admit that he would have liked staying on for another four years -- "I think I could have contributed something" -- but on the other hand he couldn't think of a "better view of the world than as perceived through the eyes of a secretary of state. . . I can't think of a job in public life that creates the global view better or more effectively than that of secretary of state."

He told of once describing it in an interview as something akin to a spaceship.

"It isn't long after becoming secretary of state that you learn the planet never sleeps, that at any hour of the 24 there's some SOB on the other side of the globe who's creating problems."

But Muskie also said that problems are the business of the State Department and trying to solve them is part of the challenge -- "that's the condition of mankind."

Muskie soft-pedaled optimism over the latest movement by the Iranians on the hostage question. He said Deputy Secretary of State Warren Christopher's flight to Algeria last night was "just part of our pattern. . . He's going over to give the Algerians the full dimension of our position."

Standing in an informal receiving line in the Coopersmith's Potomac mansion, Muskie and his wife Jane wore guarded smiles when someone asked about the possibility that the hostages might be released before Jimmy Carter leaves office.

"In the sense that if the good Lord wills it, it's possible," said Muskie, "but it's really not probable."

The dean of the diplomatic corps, Soviet Ambassador Anatoliy Dobrynin, told Muskie on behalf of his colleagues, "We consider you one of the top diplomats of your country in this century."

And in a kind of Mideast Minuet starring the Israeli and Egyptian ambassadors, Dobrynin's sentiments were expanded upon to include Muskie's efforts on behalf of peace in the Middle East. "You put a wonderful foundation down and we owe you a great deal of thanks," said Egyptian Ambassador Ashraf Ghorbal. Added Israeli Ambassador Ephraim Evron: "We are in the middle of normalization, which wouldn't have been possible without the United States or the secretary of state and we are grateful to you for keeping it going."

But there was levity too in the toasts by the diplomats. Dobrynin's, for instance:

"In Russia today we have a saying that foreigners who study Russian are optimists and those who study Chinese are pessimists."

Party talk ranged from the firing of Redskins coach Jack Pardee (co-owner Edward Bennet Williams dusted his hands of any responsibility) to Ronald Reagan's renomination of Mike Mansfield as ambassador to Japan ("He credited Al Haig with the idea and got a twofer out of it," said Sen. Cranston) to Nebraska Sen. Edward Zorinsky's announcement yesterday that he will stay in the Democratic Party.

"I don't think either party should become known as the party of conservatism" said Zorinsky, a former Republican.