President Anwar Sadat and Secretary os State Cyrus Vance ended two days of talks today with no sign of a breakthrough toward new Arab-Israeli peace negotiations after Sadat rejected a number of U. S. proposals.

At a press conference following the meetings, and edgy Sadat announced that there had been "differences."

He proposed a U. S. sponsored "working group" be convened this fall to make arrangements for a productive Geneva conference on the Middle East and thus avert a break down of the peace effort.

Vance told reporters he has agreed to contact the other Middle East confrontation states about Sadat's "work group" proposal.

Neither man would say whether the Palestine Liberation Organization would participate is such a preparatory meeting, however. and there was no sign that this knotty question had been resolved - either for the hoped for Geneva conicience.

The Arabs have been seeking acceptance of the Palestinians as a separate enity at the Geneva negotiating table while Israel is adamantly opposed to the idea.

Sadat's leeway on the Palestinian question was reduced this afternoon, in the midst of the talks with Vance, when he received a formal statement adopted last night by the Beirut-based PLO executive committee demanding independant PLO representation "in all efforts undertaken on the Arab and international levels to deal with Palestine and the middle east."

Sadat would not say whether he would back the PLO demand but he once again endorsed the 1974 Rabat decision by Arab leaders that the PLO is the sole legitimate represenatative of the Palestinian people.

Reports circulating here today said Sadat had rejected a U. S. proposal that Israel withdrawal from occupied Arab territories take place in stages over five years and be phased to coincide with Arab acceptance of travel, trade and other ties that Israel desires. Sadat has said Israeli withdrawal should be completed in six months.

Tonight's edition of the Cairo daily, Al Ahram, which like other Egyptian newspapers is subject to government directions, included a front page report that "Egypt rejects American proposals, and presents new ones." The paper said Egypt proposed full Israeli withdrawal from occupied territory, full participation by the PLO at Geneva and creation of a Palestinian state, all standard Egyptian positions.

The paper said Vance proposed Israeli withdrawal to agreed lines, Palestinian representation at Geneva only after Palestinian recognition of Israel, and the full normalization of relations beginning after a Geneva accord.

Neither Sadat nor Vance would discuss the substance of their talks with reporters, U. S. sources conceded that some American proposals were rejected by Sadat, but said that many ideas had been discussed across a broad range and sought to minimize the Egyptian-U. S. differences.

The usually ebullient Sadat, whose continuation in power is belived to rest on tangible and early progress toward a peace agreement, was grim and testy as he met reporters at his summer villa here following the meetings with Vance. Several times he raised his voice almost to a shout denying the premises of questions and charged the offending reporters with "planting misunderstandings."

As announced before the talks with Vance began, the joint press conference was telecast live to the Egyptian public.

Sadat began his remarks by saying that the meetings take place "in a crucial moment" for the Middle East in view of the greatest chance for peace in 30 years.

He went out of his way to say that he and Vance "may have differed" on certain issues. Refused to specify the differences. He added however: "We are both seeking peace built on justice."

The Egyptian president then volunteered that he had asked Vance to form a "working group" to prepare for the Geneva confernce. Vance had said nothing of such a group in his own opening remarks but later called it "an excellent suggestion" and said he would submit it for consideration to the other Arab and Israeli parties.

Sadat said he would authorize his foreign minister, Ismail Fahmi, to meet with Israel in the context of a working grouP but flatly rejected bilateral talks.

To be practical, Sadat said, working group meetings should discuss the subsatnce of a Geneva conference as well as procedures for convening a conference.

Working group meetings or some other preliminary conferences have sometimes been suggested in the past as a possible means of getting around the problem of PLO representation. Israel, however, is believed certain to object to any PLO participation in a working group.

While calling for an "early Geneva conference, Vance, declined to endorse the October target date proposed by Israeli Prime Minister Menahem Begin and since approved in a general way in the comments of Sadat and President Carter.

Sadat refused tonight to repeat his statements, made to Carter privately in April and to a group of U. S. congressmen publicly here last month, that he would consider full trade and diplomatic relations with Israel five years after ending the state of war in a Geneva agreement.

News agencies reported the following Middle East developments:

Israeli opposition members won the right to a free vote in Parliament on government plans to mark Israel's 30th anniversary next May with a military parade in Jerusalem estimated to cost $20 million. The parade proposal, narrowly approved by Prime Minister Menahem Begin's Cabinet, was challenged in Parliament as an extravangance at a time when the country is economizing on social services and defense.

Christian forces and Palestinian guerrillas traded artillery fire in southern Lebanon, wounding six civilians. The guerrilla-controlled Moslem town of NaNabatiyeh was hit by six heavy artillery shells, authorities said.

Ten American lawyers back from a three-week tour of Israel and Arab countries said Israeli security agents often use torture to force confessions from prisoners in occupied territories. The group based its finding on interviews with former prisoners and Israelis. The delegation represented the 5,000-member National Lawyers Guild, which has been active in civil rights and antiwar movements and has been called radically left wing by its critics