AT FACE, Israeli Foreign Minister Moshe Dayan's idea of bestowing civilian autonomy on the occupied West Bank, in a negotiated peace agreement, is a nonstarter. It is a formula to relieve Israel of the burden of civilian administration while preserving for it the security presence and the opportunity for Jewish settlement to which Arabs object. Mr. Dayan would be "selling" moderate Arab West Bankers hardly more than the degree of self-government that Israel may yet decided to give them for free anyway as bait and reward for edging away from the PLO. Just why Arabs would "pay" for a result so much at odds with their goals of reclaiming war-lost territory and establishing a Palestinian homeland is unclear.

Soggy as the idea is, however, the context in which it's being presented gives it some interest. In August, the United States, figuring that Palestinian representation was the key to the door of a reconvened Geneva peace conference, made a series of imaginative and generous overtures to the PLO. The Israelis protested loudly. But, kicking unprecendented opportunity away, the PLO went into its all-or-nothing posture and rejected the American overtures. The upshot was the collapse of the administration's central effor at including mutual Israel-Palestinian compromise. The administration on Monday reasserted its determination to contine this effort but did not indicate just how it intends to get around the August impasse. Amid this diplomatic desolation, the Arabs have come forward only with suggestions for a tougher American squeeze on Israel. The Israelis are now coming forth with their own draft peace treaty, including the West Bank idea. Mr. Dayan is due in Washington shortly to present it.

Is this the time for pausing; for accepting the fact that the administration's quest for a comprehensive settlement has been derailed, at least for the time being; a time for seeking less ambitious approaches in order to reestablish momentum?Mr. Dayan's West Bank idea at least has the advantage of building on the substantial practical coexistence generated by his earlier idea of maintaining "open bridges" across the Jordan River. "My formula is not a wonderful solution," he says, "but all the others are by far worse." Notwithstanding the State Department's words on Monday concerning the importance of Palestinian representation at Geneva, it is not evident that the administration has recovered enough from its August frustration to offer a productive alternative of its own. So Mr. Dayan's proposal is worth examining as a starting point. There will be time for others to show what feasible improvements they can offer.