Moshe Dayan, the most likely candidate to become Israel's next foreign minister, painted a gloomy portrait last night of the prospects for a negitiated Middle East peace, saying "I am sorry, I cannot see any agreement in sight."

In an unusual forum organized by Hebrew University, former Defense Minister Dayan appeared on the same platform with a former Jordanian defense minister. Anwar Nusseibeh, to debate the lessons learned after 10 years of military rule in the occupied territories.

The lesson, as far as Dayan was concerned, was that no Middle East peace agreement is possible, at least not for the foreseeable future.

"Maybe we will have to live without a solution because we have been trying for 30 years . . . and I cannot see any solution that would be acceptable to the two parties," Dayan said.

"What we want, the Arabs reject, what they suggest, we do not want to accept. So, it is as simple as this: It is not (Menachan) Begin or Golda (Meir) or (Levi) Eshkol or (Yitzhak) Rabin, it's everybody . . . saying we shall not go back to the old line and that we shall not have a Palestinian state. While the other party (the Arabs) say go back to the old line . . . cut Jerusalem in two and have a Palestinian state on the West Bank and Gaza. Except for the Communists, there is no (Israeli) party that will accept this."

Unlike Begin, the Likua Party leader who has been designated to form a new Israeli government, Dayan said he did not call the occupied territories "Liberated." Dayan said he had no objection to the word "occupied" because he had no illusions that the Arabs like the Israelis. But, he said, the territories are under Israeli military occupation today as a result of the refusal of the Arabs to accept partition of Palestine in 1948.

This did not mean, however, that Israel should not enter into peace negotiations with the Arabs, Dayan said.

"I do appreciate very much the fact of negotiations," he said. There is a gap between the Israeli concept and the Arab concept but (the fact) that both parties "still do not reject the idea of sitting down and negotiating is very important."

First, Dayan said, Israel's main interests in the occupied territories are that the Jews should have the right to own land and live on the West Bank - not through expropriation of land but through legitimate sale. Jordanian law forbids the sale of land to Jews under penalty of death.

Secondly, Dayan said that Israel should maintain its military bases and aircraft early warning stations in the West Bank - "not to impose ourselves upon the Arabs" but to provide security for the embattled Jewish state.

Nusseibeh, a member of an old and prominent Jersualem Arab family, stressed to the predominantly Jewish audience that the Palestinans had just as much affection and longing for the land of their ancestors as did the Jews. He said the two peoples should find a way to accommodate each other but that the lessons of the past 10 years "have at best been gloomy and the prospects for the future not much brighter."

He praised the "open bridges" policy that Dayan put into effect 10 years ago, which allowed people on the occupied West Bank to travel to Jordan. But he said it should not harden into a permanent policy in which Arabs are first denied any political rights and then persuaded to leave.

Nusseibeh said that Israel could not keep an unhappy population on the West Bank and in Gaza forever without either losing its democracy or losing the demographic balance it requiries to maintain itself as a Jewish state.

Empires, he said, were out of date and empires so close to home had a corrupting influence on the home country.