President Carter said yesterday that Israeli Cabinet approval of the U.S. proposal for Palestinian representation at a Geneva peace conference is "a first step" toward an eventual Middle East peace settlement.

"Every week now is bringing about some progress toward a Geneva conference," the president said. "I think there has been a substantial alleviation among the leaders of the Middle East nations of their concern about the results of a Geneva conference. I think they're all beginning to see it's not something they need to fear."

Carter spoke outside the Oval Office a day after the Israeli Cabinet decided to accept the administration's Geneva conference proposal. The State Department said Tuesday night that the Israeli decision was a step forward, but warned that the Arab states may demand changes in the still-secret "working paper" the Israelis accepted.

"It's a first step toward a possible final peace settlement but it's extremely sensitive and extremely complicated," Carter told reporters. "The national leaders . . . have made very abusive statements in the past. It's hard for them to correct or modify those statements in a constructive fashion, but they're doing their best."

"I don't believe there is any nation now that I couldn't say is genuinely striving for the convening of the (Geneva) conference and an ultimate settlement," the President said.

Asked whether creation of a Palestinian state would lead to the destruction of Israel, Carter replied: "I never advocated an independent Palestinian state."