The last hopes that the Belgrade conference would produce substantive steps to strengthen East-West detente were crushed yesterday as the Soviet Union rejected outright the latest Western proposals.

The move apparently produced a belief among western diplomats that the current impasse could not be overcome.

As a result, Western delegates to the six-month-old conference reviewing European security and human rights are now preparing a slim communique that would contain little more than a decision to meet again in Madrid in 1980.

The soviet rejection came after President Tito of Yugoslavia and President Valery Giscard d'Estaing of France made last minute appeals for flexibility to soviet President Leonid Brezhnev.

When Western allies yesterday presented a 22-page draft document on human rights for inclusion in the final communique of the 35-nation gathering. Soviet delegate Yuli Vorontsov asserted that his country was not prepared to even consider it.

Given continued Soviet intransigence and the belief that it is now unrealistic to seek a substantive document. Western delegation are now trying to produce a shortened draft communique acceptable to all.

"We want to cut out all the meaningless waffle about detente which the Soviet Union will no doubt try to shove in," one Western delegate said.

A two-page draft is circulating among Western delegates stating that a meeting has been held, that there has been a thorough exchange of views, and pledging once again to implement fully all the provisions of the 1975 Helsinki declaration, as well as an agreement to meet again in Madrid. The draft calls for the establishment of two working groups on scientific cooperation and the peaceful settlement of disputes.

Another draft under consideration by neutral delegations is several pages longer, but does not add much of substance.

While Western delegates are clearly disappointed at the lack of agreement on a substantive document, they are stressing that this does not mean that the whole exercise has necessarily been a failure. It is argued that last fall's debate on implementation set a precedent for the happiness of the individual to become a factor in international negotiations.

The failure to produce a substantive Belgrade declaration is a much greater blow to the neutral countries who saw the conference as an alternative to big-power diplomacy.

Particularly worried is Yugoslavia, the host Tito staked his personal prestige on sending a message to Brezhnev urging him to end the deadlock.

French delegates have told their Western colleagues that in their opinion Brezhnev's response to Giscard's message amounted to a rejection of a compromise French proposal.

Referring to the harrassment of Helsinki monitoring groups in Eastern Europe, the rejected Western draft stressed the role of the individual in implementing the Helsinki Final Act. It stated that many of the promises given at Helsinki have yet to be fulfilled.

Soviet delegates have accused the United States of blocking the negotiations and suggested that they would have been prepared to make more concessions had the United States taken a less polemical line on human rights.