Beyond the backing and filling over an agreed-upon formula for Geneva peace conference is a reality that counts for more in the Mideast than all the words spilled thus far. That is the U.S. aid program for Israel providing $1 billion in what are labeled foreign military sales credits.

This is a clear signal of the U.S. intention to ensure the existence of the Jewish state surrounded by Arab enemies. It is currently the third fiscal year in which $1 billion in arms sales and $800 million in economic aid have been appropriated for Israel.

In theory the arms money is to underwrite sales. Half of the total, however, is made an outright grant. The balance is not to be repaid for 10 years, which will be an interest-free interval, so that when repayment begins the interest rate will be proportionately lower.

Preparations have already begun for fiscal year 1979, and the expectation is for great pressure from Israel and from the Congress to increase the military total by at least a half billion dollars. The guess of those concerned with military sales is that this increase - along with all other budgetary increases - will be resisted by the Office of Management and Budget.

The argument of the Israelis for an increase is based on what in Pentagonese is known as the bean count. They add up every plane, every tank, every gun in Arab hands from Libya to Iraq to come out with a total far exceeding what is in Israeli hands. That, at any rate, is their argument in public.

Privately they express their profound concern over the future of their nation in terms of the casualties in another Mideast war even though they would almost certainly win such a war. Israeli casualities in the 1973 Yom Kippur war would have been equivalent to a 500,000-man loss by the United States. In a country of 3 1/2 million that can mean extinction.

In the Israeli military pipeline perhaps as much as $2 billion is in the planning and preparation stage. In addition to getting materiel from the United States the Israelis buy as much as $300 million a year from European suppliers.

Sources with every reason to know make the following statement. Over the next five years Israel will have a clear superiority over any combination of forces in the area. That is the response to pressures for a large increase in military aid.

On the economic side the weight of the arms burden and the loss in manpower of the men and women who must manage it is heavy. Of the $800 million in economic and $450 million is taken out of the loan category and made a gift Preparation for the new budget is likely to see the same kind of pressure on the economic on the military side.

It is hardly an exaggeration to say that Israel is a nation under arms. All males over the age of 18 must serve in the military for three years, all women for two years. After their service they remain in the reserves until the age of 50, subject to one month of reserve duty every year.

The military requirement is one reason for the virtually static population growth As young people leave and immigration falls, the net gain is 5,000, or by some estimates no gain at all. Short of a dramatic reversal this makes wishful thinking of the claim of Gen. Ariel Sharon, minister of agriculture in the Begin cabinet, to put 200,000 settlers in the "liberated" West Bank.

Hardships in Israeli life call for sacrifice, which goes along with dedication to the cause of the Jewish homeland. Inflation today stands at 34 per cent. And while wages are indexed to take account of the rapidly rising price increases it is hard to keep up with the month-to-month jump in the cost of necessities.

Taxes are as high as in any country except possibly Britain or Sweden. The margin of life is close to the bone. A Volkswagen with purchase tax costs $9,000. Gasoline is $1.50 to $2.00 a gallon.

The only remaining surviving pool for Jewish emigration to the homeland is the Soviet Union, with perhaps as many as 3 million Jews. One reason for Israeli resentment is the savage means used by Moscow to intimidate Jewish emigrants. An irony is the fact that nearly 50 per cent of those who do leave elect to go not to Israel but to the West, mainly to the United States.

Is an outright military alliance, with a U.S. naval base at Haifa, an answer? Possibly - but it raises almost as many questions as it answers.