Israeli Foreign Minister Moshe Dayan tonight called upon the Israeli people, all political parties and the government itself to reconsider their positions on holding on to the occupied territories, including the West Bank of the Jordon River.

He said that this reassessment has become imperative as the result of Egyptian President Anwar Sadat's visit to Israel this week, which for the first time in Israel's 30-year-old conflict with the Arabs presents the prospect of peace.

"On the part of Egypt, readiness has been shown to make peace on terms, which may be unacceptable to us, but which should bring us nevertheless to the crucial stage of making decisions on the price we are willing to pay in return for peace," Dayan said in a Israeli television interview.

The foreign minister, who earlier in the day made similar statements at a press conference, obviously hinted that Israeli parties, including Prime Minister Menahem Begin's Likud party, which is on record as opposing territorial concessions on the West Bank, must be ready to reconsider their stand on Israel's future borders.

He said that until the visit no such clear cut decisions were needed since israel could claim it had no partner for the negotiations. However, he said Israel now is forced to make up its mind whether it wants to make peace and pay the price or remain in the same position it has held until now.

"All the old concepts, such as proximity talks or shuttles have fallen by the wayside," Dayan said. "We have now been confronted with the need to decide."

Replying to criticism that Israel should have made some gesture to Sadat and not have allowed him to leave "empty handed," Dayan emphaticly claiming that the Egyptian president did not want such a gesture. At one point in the talks Sadat said, "I did not come to collect crumbs from your table," Dayan recalled.

"It may be too early still to draw the final map of peace, but we should make decisions on how far we are ready to go," Dayan said. He admitted that he may have to reconsider some of his convictions including his view that Sharm-es-Sheikh, on the southern tip of Sinai, is of vital importance to Israel's defense.

The emphasis in the talk with the Egyptian president w as on "continuity," meaning the initiation of substantive direct negotiations between Israel and Egypt, Dayan said.

"The Geneva conference, and especially the problem of the representation of the Palestinians there, was scarcely touched upon in our talks," Dayan said, denying press reports that procedural obstacles to the reconvening of the talks were dealt with during Sadat's visit.

[The official Middle East News Agency said Wednesday evening in Cairo that Israel is expected to agree to allow known Palestinian supporters of the Palestine Liberation Organization to attend peace talks in Geneva, Reuter reported. There was no Israeli confirmation of the report.]

Dayan noted that even before coming to Israel Sadat expressed his readiness to accept the provisions in the working paper agreed to by Israel and the United States concerning representatives of the Palestinians at Geneva.

"When we discussed it in Jerusalem," Dayan added, "President Sadat showed little interest in the subject, and at one point said to me 'Well said, this is exactly so Moshe'."

As Dayan explained it, Sadat sees the Geneva conference as the forum where he and the other Arab countries can come and sign a peace treaty, since under no conditions will he be ready to sign a separate agreement with Israel. However, under the present conditions an early convening of the conference does not seem feasible because Egypt must settle its present differences with Syria and the other Arab states that objected to the Jerusalem visit.

Furthermore, Sadat believes before the Geneva conference can be held, most substantive issues should be worked out, Dayan said. This is due, at least in part, to Sadat's reluctance to have the Soviet co-chairman of the Geneva talks play a major role, according to Dayan. Yet, at the same time, Dyan pointed out, both Israel and Egypt acknowledge the role of the United States in the forthcoming negotiations.

Dayan revealed that before Sadat and Begin addressed the Knesset he asked the Egyptian president what kind of reply he would like Begin to make in his speech. Sadat said that he wanted a frank statement of the Israeli position including what it is and is not ready to do.

The Israeli foreign minister also disclosed that Cabinet members had suggested that Israel make unilateral concessions such as providing Egypt with free access to El Arish, the town on the northern Sinai coast. But it soon became apparent that such gestures would have been counterproductive since Egypt presented the case for all the Arabs and did not want to appear as being rewarded by Israel for the Sadat visit, Dayan explained.

Dayan made it clear that the basic positions of Egypt and Israel on subjects such as the nature of peace, security borders and a Palestinian state were not drawn closer by the talks since there was not enough time to begin exploring them. However, the negotiating process was considerably speeded up, he said.

The Israeli minister tried in both his media appearances today to correct some misconceptions that developed as a result of the excitement of the visit, which he himself had termed "an earthquake and an historic gesture." For example, he said continuity does not meant that normal relations can be expected in the very near future. Hopes for soccer games, orchestra tours, direct telephones service or even trade may be premature.

Dayan said that Sadat made it clear when he cited the Arabic phrase "a just peace" he meant a settlement in line with the United Nations charter, which requires that disputes be resolved in nonbelligerent fashion. However, this does not mean that there will be an Egyptian embassy in Jerusalem or an Israeli embassy in Cairo, Dayan explained.

Dayan may also have dampened some enthusiasm when he gave his interpretation of Sadat's slogan "No more wars," repeated several times during the visit. "This is not a commitment to nonbelligerence," he explainted. "If we withdraw from the occupied territories there will be no more wars. However, if we do not withdraw then the military option remains.

Earlier today Deputy Prime Minister Yigael Yadin said in a radio interview that he expects the United States will indicate to Israel that it must not let Sadat down.

"But there should be pressure from within here as well" Yadin said, "because the moment of truth has arrived." He also emphasized that no procedural problems concerning the convening of the Geneva conference were discussed in Jerusalem.