President Anwar Sadat today swore to preserve his floundering Middle East peace initiative in a speech designed to bring world public opinion to bear on Israel to change its "arrogant" stand.

"We will not accept that this Egyptian peace initiative can be aborted." Sadat declared. "The peace initiative will never be dropped. The will for peace will triumph."

The only major surprise in his 105-minute address to the Egyptian People's Assembly was a request to President Carter to "arm Egypt with all the arms Israel has got."

But the context of his appeal to lift the virtual American arms embargo against Egypt made it clear that Sadat was trying to show that massive U.S. arms supplies to Israel were greatly responsible for what he considers Israeli intransigence.

The thrust of his speech was a detailed recapitulation of the reasons that prompted him to recall his negotiators from the Jerusalem political committee talks Wednesday.

Sadat's only major depature from his otherwise moderate tone was a warning to Israel to drop its insistence on maintaining settlements in the northern Sinai Peninsula.

The warmest applause of the evening came when Sadat said that while he would "rather go to the end of the earth to avoid shedding a single drop of blood of one of my soldiers," he "would not allow one square inch of my territory to be given away even if I have to fight to the end of the world."

But Sadat made it clear that he was determined to press on with hispeace initiative.

"The world will not accept that the Egyptian peace initiative" - which he repeatedly called "the biggest event in contemporary history" - be aborted, Sadat declared. "The world knows the consequences if this rare opportunity for peace slips away."

The speech was peppered with explicit appeals for understanding not just to Egyptians, but to the citizens of the world - especially of Israel and the United States.

Sadat went out of his way, however to praise President Carter, Secretary of State Cyrus Vance - whom he met yesterday outside Cairo - and the United States in general.

Various Carter administration endeavors were described as "supporting creative and positive." He also thanked the United States for helping clear the Suez Canal without cost prior to its reopening in June, 1975, and for providing $1 billion in annual aid.

But despite Vance's efforts in their meeting, Sadat maintained that the work of the political committee could not continue until Israel accepted the principles of evacuation of Arab land occupied in 1967 and Palestinian self-determination.

Singled out for critism alongside Israeli Prime Minister Mehahem Begin was the Soviet Union, which Sadat accused of "subversive activities against peace" by suggesting he was seeking a separate peace with the Jewish state.

Observers here saw Sadat's attack on the Soviets as a way of avoiding direct criticism of Egypt's Arab opponents. In his sppech, Sadat mentioned only Col. Muammar Qaddafi, whom he called the "Lunatic of Libya," and Syria. Previously, he has named many of his Arab critics and denounced them as "dwarfs."

Justifying his abrupt decision to interrupt the Jerusalem peace talks, Sadat said the Israelis were "playing for time" and "exploiting our recognition of the importance of Israel's security."

He reiterated his now classic argument that the Egyptian army's ability to cross the Suez Canal and hurt the Israelis in the early stages of the 1973 war destroyed forever Israel's contention that only territory could guarantee its security.

Egypt, he said, "is not seeking peace at any price." He charged that "Israel is playing for time, seeking to reduce the momentum in the hope that the enthusiasm for Egypt's peace initiative will fade away."

Egypt would accept "all serious guarantees" on security matters "but we shall not cede our land or sovereignty or Palestinian self-determination."

Sadat also spelled out a plan for a U.N. prsence in the West Bank and Gaza Strip "until self-determination takes place." Such a presence could last, he said, one, two or three years, but not more than five" in order to win over the Israelis who still adamantly reject any future independant Palestinian state there.

Apparently stung by an Israeli suggestion that he launched his peace crusade out of desperation - after the Soviet cut off arms supplies and Egypt's economic situation worsened - he said. "We are not pleading or begging" and noted Israel's own economic problems.

Sadat called Begin's insistence on maintaining the settlements and his contention that Israel did not need Arab recognition examples of the Israeli leader's "old tone of arrogance."

He said that during his Washington visit last April, President Carter had asked him to put on the agenda of his talks that very question which Sadat said "Israel has been demanding for 30 years."

This approach was a major Sadat theme today as he fooled many observers who had been convinced that he would announce everything from his resignation to an Arab summit meeting during the speech.

Sadat also avoided direct criticism of the United of the United States or suggestion apply pressure on Israel to adopt more reasonable policies.

Even the weapons request was couched in moderate tones. The Egyptian president did say, however, that he had protested to Vance yesterday about reports that the United States is to sell Israel 50 advanced fighter-bombers.

"I officially asked - and for the first time - Vance to ask the American President to arm Egypt with all the arms Israel has got and I will pay for it," he said.

"I am not asking for arms to attack Israel," Sadat insisted. He said his stance was justified "as long as there are leaders in this region who think that the arms arsenal will achieve everything."

Begin's instransigence, he suggested, was the "outcome of the arsenal" the United States has provided Israel over the years.

Egypt's 300,000-man military has received American jeeps, drones and a few C-130 Hercules transport planes, but no major offensive weapons.

Egypt still relies on Soviet equipment, although Sadat complained that the Soviets have cut off spare parts sales and cancelled old arms deals within the last year, insisting on cash payments.