"The Street Called Straight" is the name of one of tha main drags, and chief tourist attractions, here. That name, with its hint of things not being exactly as they seem, conveys nicely the diplomacy being pursued by President Hafez Assad of Syria in response to the visit made to Israel by Egypt's President Anwar Sadat.

At times Syria acts in conjunction with the most radical elements of the Arab world in condemning Sadat's opening to the Israelis and the forth-coming Cairo negotiations. At other times President Assad shows himself prepared to derive whatever benefits he can should the Egyptian-Israeli dialogue succeed.

The harsh, radical stance is not just a put-on. Syria has always been the militant standard-bearer of Arab unity. President Assad, and those around him, come from a military faction of a socialist party, the Balath, and are members of a small Moslem sect, the Alawites.

They are thus a minority in a minority in a minority. They are triply bound to assert with force Syria's national aspirations. The more so as those aspirations are the rationale for maintaining military rule and a huge security system.

So Foreign Minister Abdul Halim khaddam charges that Sadat's visit to Israel makes him "a traitor to the Arab cause," and says that Sadat can "no longer be considered an Arab leader." Information Minister Iskander Achmed says, in an interview that "Syria wants to overthrow Sadat."

Some deeds go with those words. Khaddam visited Moscow and drew from the Russians a refusal to take part in the Egyptain-Israeli negotiations. The Syrians clearly pushed the Plaestine Liberation Organization - especially Yasser Arafat, who was originally mum about Sadat's visit to Israel - into a hard-line denunciation. Thus a joint Syrian-PLO statement made from Damascus on Nov. 22 called on "all Arab counties to condemn [Sadat's] visit." It invited the Egyptian army to "confront Sadat's pan-Arab treason".

Using the threat of PLO radicalization, the Syrians prevailed upon King Hussein of Jordan not to enter the Cairo talks between Israel and Egypt. Finally the Syrians attended the Tripoli conference with the radical Arabs - Iraq, Libya, Algeria, South Yemen and the PLO - and joined them in resolutions to limit diplomatic ties with Egypt and pull the Arab League from Cairo.

But President Assad personally is that rarest thing in the Middle East: A calm Arab. He has kept his cool toward Sadat and the option of drawing any benefits that might accrue from a successful negotiation between Egypt and Israel.

Thus, at the Tripoli conference, Assad held the condemnation of Egypt down to the bare minimum. He resisted Iraqi pressure to renounce. United Nations resolutions that lie at the heart of the present Egyptain initiative and the previous drive for a Geneve confernece.

In a press conference on Nov. 23, he described the relationship between Syria and Egypt as "a disagreement" but "not a divorce." He tells visitors the heart of his disagreement is the conviction that the Sadat approach won't work. He specifically repudiates his foreign minister's assertion that Sadat has ceased to be an Arab leader. "Sadat", he says, is the president of Egypt".

Solid interests, not a put-on, also lie behind President Assad's more moderate stand. For one thing, the Sadat initiative appears to the quite popular here, and the president cannot easily afford to be seen blocking what many Syrians perceive as the road to peace.

Attacks on Sadat by other Arab leaders, moreover, only work to increase the Egyptian president's popularity at home. Hence his decision to escalate the tension by breaking diplomatic relations with the countries attending the Tripoli meeting.

An all-out commitment against Sadat, furthermore, might provoke an Israeli attack that would wipe out the Syrian regime, if not its army, in a matter of hours. Embracing the radical stance would also make it seem that Assad's mortal enemies - the radical wing of the Ba'ath party, which runs Iraq - had been right in criticizing him for softness all along. Finally, while distinctly unhappy about the Sadat initiative, while probably hoping that it fails, Assad would like to know what's in it for him.

This two-track policy suggests that President Assad's true interest is to have neither peace (which) would shake, if not topple, his regime) nor war (which would destroy it). Making Syrian entry to the Geneva conference a centerpiece of American policy was thus a fatal weakness in President Carter's approach to the Middle East.

Sadat's trip to Jerusalem, however, has exposed Syria's interest in equivocation, and is now forcing a choice upon Assad. So if the Israelis offer a general settlement satisfactory to the Egyptians, the Jordanians and atleast some Palestinians, it is hard to see how Syria can stay out.