The Israeli Cabinet's unanimous approval of the joint U.S.-Israeli working paper on the reconvening of a Middle East peace conference represents a procedural concession in that Israel is now apparently willing to sit down with Palestinians at Geneva. This represents a bold move in terms of Israeli domestic politics and may yet get the government into trouble.

Yet Israel has already set up so many preconditions as to who may be considered an acceptable Palestinian that the United States may find it very difficult to sell this paper to the Arabs. Israel's apparent refusal to even discuss a Palestinian entity at Geneva also makes it doubtful that last night's action can be considered a major breakthrough.

In the words of one political observer here, the government's tactic is to show enough flexibility on procedural matters both to please the Americans and to "smoke out the Arabs" in order to show, at bottom, that the Arabs are unwilling to compromise.

Government officials here took pains today to point out that this is only a proposal that the American will now have to submit to the Arabs. The Arabs may refuse the paper entirely or demand changes that would have to be resubmitted to the Israeli government again.

The Israelis recognize, however, that the Americans are committed to the reconvening of a Geneva conference and that there is a momentum in the outside world toward Geneva. The American hope is that if Geneva can be reconvened there will be enough vested interest on both sides that an agreement can be reached.

The Israelis also recognize that not even the American ideas on a final settlement coincide with their own and that given the gap between Arab and Israeli demands, an overall settlement may not be possible.

Nonetheless, it is the Begin government's position that it is better to give Geneva a try and if it fails, to try to put the blame on the Arabs.

The major procedural question is still the Palestinians. Moshe Dayan said yesterday that even Palestinians from the West Bank and Gaza, "whom we live with all year round," would not be acceptable if they said they represented the PLO.

There is a chance that West Bank mayors might be allowed to go to Geneva with the approval of the PLO but without having been actually designated by the PLO. But these conditions would be difficult for the Arabs to accept.

One problem, as the Israeli paper Maariv said today, is that the Cabinet's approval of the working paper "cannot dispel the lack of clarity surrounding it."

The text has not been made public and it is not certain whether the paper approved last night represented everything submitted or whether there are separate 'protocals" to which the Americans might not have to agree or pass along to the Arabs as an American position.

These might include Israel's refusal to even discuss a Palestinian entity at Geneva or its reservations on who can be considered a legitimate Palestinian.

These Israeli objections have been so well publicized, however, that there can be no doubt in the Arab world where Israel stands.

If, Ultimately, the Israelis will not even discuss a Palestinian entity or entertain any withdrawal from the West Bank and Gaza, the prospects for any success at Geneva would appear dim even if the conference is reconvened.

Egypt's President Sadat said recently that war would be inevitable if Geneva fails.

Israel, on the other hand, recognizes that despite her military superiority, the Arabs are growing in both strength and skill. A new war, even if Israel wins, would involve unacceptably high casualities.

Therefore, the Israeli tactic now is not so different from what it has been for many years: Stall and procrastinate for as long as you can and maybe some development in the Arab world will come along to take the heat off for a while.