Egypt's acting foreign minister, Boutros Ghali, said today that Egypt and Israel had reached an understanding that Palestinian participation in the Geneva peace talks is essential to a comprehensive settlement.

Ghali said the two countries had also agreed that there will be further contacts between their "experts," who would "prepare the road to Geneva." But he would not give details about who the experts would be or when and where their contacts might occur.

Ghali's remarks were made in a conversation with American reporters about last weekend's visit by Egyptian President Anwar Sadat to Israel. As a result of that trip, Ghali said, Egypt and Israel have "passed the point of no return" on the road to peace.

In what appeared to be a warning against over optimistic assessments of the visit, however, Ghali emphasized that "nothing has been decided" about a format for a new peace conference in Geneva and that Egypt and Israel have not yet reached agreement on a formula for Palestinian representation.

"We must not hurry," he said. "It takes more time than you would believe." In his caution and his denial of widespread reports that an agreement had been reached on Palestinian representation. Ghali corroborated statements made in Jerusalem yesterday by Israeli Prime Minister Menahem Begin.

But Ghali was far from gloomy about the outlook for progress, although he repeated that there had not even been any discussion, let alone agreement, on such issues as the nature of the Palestinian representation at Geneva.

What was achieved in Israel, he said, was not an agreement on how Palestinians would participate in peace negotiations but an understanding that they would have to do so if the peace settlement is to be comprehensive.

"The Israelis have been convinced that it's their own interests to have a comprehensive peace and this cannot be achieved peace without the Palestinians," Ghali said.

Well-placed diplomats here said they had no reason to doubt Ghali's statements that Egypt and Israel have not gone into details on the process of peace negotiations. But expectancy is still high that a major breakthrough will be announced in a speech Sadat is scheduled to deliver on Saturday.

There has been widespread speculation that Egypt and Israel had already agreed on some formula for Palestinian representation at Geneva, which has been a stumbling block since Israel refuses to negotiate with the Palestine Liberation Organization. The PLO is recognized by the Arab states as the "sole legitimate representative" of the Palestinian people.

Ghali said this was "one of the things that ought to be prepared" beofre invitations to Geneva are issued and added that Egypt would discuss it with other Arab states and Israel.

Egypt indicated today that the search has begun for a formula on Palestinian representation that they, the Israelis and the Palestinians could accept.

The Arab Socialist Party of Egypt, which dominates the government, decided to invite Palestinian leaders from th occupied West Bank of the Jordan and Palestinian Arabs from Israel to come to Egypt to discuss the outcome of the Sadat trip, the official Middle East News Agency reported.

Prime Minister Mamdouh Salem was in the chair when the invitation was decided upon, the news agency said, which means it has Sadat's approval. It is not clear what role the Arabs from Israel could play in this process, since they are Israeli citizens and would never be accepted to speak for other Palestinians in any way.

The Middle East News Agency has reported that Israel is expected to declare its willingness to accept known PLO supporters, if not actual PLO members, in an Arab delegation at Geneva. Ghali said the Egyptians were hopeful that some such offer might emerge from the Israeli Cabinet meeting today, but if any did it has been kept secret.

Ghali was asked if it still true, as Sadat has said many times, that "the United States holds 99 per cent of the cards" in the Middle East. With a broad grin, he replied, "It is time for a change in the proportions." The decisive moves are now up to Israel, Egypt and the Palestinians, he said.

In that comment as in others, he displayed the same confidence in Egypt's go-it-alone negotiating initiative as other Egyptians are showing. Early fears that Egypt might be forced to retreat by the outcry from some other Arab states have given way to a heady satisfaction at this display of Egypt's political power.

"Of all the Arabs in the world, more than a third are Egyptians," Sadat said - inescapable fact that has left Syria and "rejectionist" states that oppose any settlement with Israel fuming on the sidelines while Egypt forges ahead.

It now appears that the only force in the Arab world that could get Sadat to retreat is Saudi Arabia, and there is no sign that the Saudis are actively opposing Sadat's initiative despite some initial reservations.

Cairo newspapers reported today that Sadat had received a message from King Khalid praising him for his "efforts and sacrifices for the Arab cause." The text was no printed and Egyptians are not claiming Saudi support for the Israel trip specifically, but Ghali said the message stressed the "warm relations" between Sadat and Khalid.

Ghali head of department of political science at Cairo University, was suddenly thrust into a position of prominence when Foreign Minister Ismail Fahmi abruptly resigned a week ago in protest over the Israel trip. The other principal figure in Egypt's foreign policy establishment, Minister of State for Foreign Affairs Mohammed Riad, quit with him.

The result is disorganization and some confusion in the Foreign Ministry, but it is clear that while Ghali is doing the talking, Sadat alone is making policy. Ghali said his week in office had taught him "what it is like to live without leisure time."

It is taken for granted by Egyptians and foreign diplomats alike that he will not be given a permanent appointment as foreign minister because he is a Coptic and his wife is a Jewish.