Israel and Egypt indicated yesterday that both sides intend to continue direct contacts aimed at reviving the stalled peace talks even though the Israeli Cabinet tacitly admitted the failure of Defense Minister Ezer Weizman's effort in that direction last week.
After a five-hour meeting, the Cabinet issued a communique expressing "regrets at the refusal of the government of Egypt to reconvene the negotiations in the military and political committees" that collapsed almost three months ago.
The Egyptians had been saying since Weizman's visit to Cairo on Thursday and Friday that his mission had failed. Yesterday's Israeli statement called on Egypt to "reexamine the positive Israeli proposals aimed at the renewal of the peace negotiations."
Egyptian President Anwar Sadat, in an interview with October magazine, said that direct contacts with Israeli would continue in the effort to resume the formal negotiations and that Weizman would return to Egypt in the week beginning April 9.
Weizman himself hinted at a return visit to Cairo when he told a meeting of the Herut faction of his Likud Party on Saturday that his recent trip to Egypt would not be his last.
It is understood that Weizman took some Israeli proposals for recoventing the deadlocked talks and Cabinet secretary Aryeh Naor said yesterday that it would be reasonable to assume Weizman brought some Egyptian proposals home with him. Weizman left the Cabinets meeting carrying large maps.
When asked if formal talks would continue, Naor said. "We are ready for any kind of talks and negotiations and we want the political committee and the military committee to be reconvened."
Sadat, however, wants a commitment from the Israelis to withdraw from the occupied West Bank and Gaza as well as the Sinai and a commitment to allow the Palestinians to participate in their own future.
President Carter is understood to have told Israeli Prime Minister Menachem Begin in Washington that sadat would settle for something less than total withdrawal from the West Bank and would not insist on a Palestian state.
Nonetheless, Begin's position appears to the Americans and to the Egyptians as a refusal to make any commitment to withdrawal on the West Bank and Gaza or to allow the Palestinians who live there any real choice in their destiny.
The Israelis say that these issues should be negotiated at the political and military talks which Sadat and Begin agreed upon at Ismailia on Chritmas Day. The talks were broken off by Sadat in January.
"As far we know," Naor said, "there is a refusal of the Egyptian government to reconvene the two committees. They still refuse that they will re-axamine their position. It was agreed upon . . . that concrete proposals in the two committees. Let's renew the committees," he said.
That did not mean, Naor said, that Israel was refusing to make any new proposals until the committes had been reconvened "but it means that what was agreed upon is to be carried out."
Thus the deadlock remains but both sides appear to be committed to continuing the effort to break the deadlock.
Sadal also appeared to be appealing directly to the Israeli people when he said that Begin was an "old-fashion politician, incapable of breaking the psychological barrier between Jews and Arabs in the Middle East." He said that it was up to the Israeli people to choose what was best for them. "We know what is happening inside Israel," Sadat said.
The Egyptian press gave prominence to the peace demonstrations in Tel Aviv Saturday which attracted about 20,000 people, according to the best estimates. The mood was summed up by placards which said: "Peace is preferable to control over the entire land of Israel" and "Security plus compromise equals peace.
The demonstration grew out of the efforts of 300 young reserve officers, some of whom had received Israel's higgest decorations for valor in combat. They wrote Begin several weeks ago that they will willing to fight again if necessary but they wanted assurances that their government was doing all it could to avert war.
Begin and the government dismissed the appeal harshly and said the reservists were tools of the opposition.
Cabinet secretary Naor, asked if the Cabinet had discussed the peace demonstrations, said he knew of no peace demonstrations - only of demonstrations by the political opposition which are common in a democracy.
Begin's private secretary Yechiel Kadishai said the demonstration was organized by the opposition Labor Party who trucked kibutznocks in for the occasion.
However, the original 300, who claim to have now collected 10,000 signatures for their cause, strike many Israelis as being middle of the road. Thus it will not be easy for the government to dismiss this voice of rising protest merely as a partisan political move.
On the other hand, Begin's political position does not seem threatened at the moment, as a vote in Israel's parliament last week during the debate on foreign policy demonstrated.