THE BEGIN GOVERNMENT proposed five years of limited Palestinian autonomy in the West Bank and Gaza last December. At first glance it looked promising, at least as a basis for negotiations. But it soon became apparent that Prime Minister Menachem Begin had nothing more in his pocket for the period following the five years. So Egypt quit the Jerusalem talks; it could not see its way clear to negotiating over the Sinai if the Palestinians were not offered a crack at halfway decent terms, too. The United States then sought to bridge the gap by asking the Israelis just what their long-term intentions for the West Bank and Gaza were. It was these American questions to which the Israelis responded on Sunday in what was, even to a great many Israelis, a deeply disturbing way.

Different Israelis, to be sure, have different objections. Tactical questions aside, the basic difference lies here: Mr. Begin and his supporters believe, for religious and strategic reasons, that Israel should retain ultimate control over the West Bank indefinitely. Other Israelis believe that some part of the West Bank should be dealt back to Arab control under conditions ensuring Israel's security. The new Begin position is a certain improvement over the old, but the changes all reflect the prime minister's fundamental commitment to preserving ultimate control.

To the religious grounds for his policy, one can say only that Israelis took on a heavy responsibility by electing to political leadership a man who does not regard the main issue facing his nation as political - that is, as subject to argument and negotiation.

On security grounds, however, the Begin policy cries to be challenged. It would keep intact a larger rather than a smaller area for Palestinians and, as demands for greater autonomy grow - as inevitably they will - Israel would find itself with an undigestable Palestinian unit on the very pre-1967 border that it has long insisted is most inherently insecure. It would make more sense to acknowledge that a Palestinian grievance exists and its legitimate and to let it work itself out within borders that are marginally more secure for Israel.

With "autonomy" under Israeli control, moreover, it would be only a matter of time before Palestinians, supported by all Arabs, would be agitating for "decolonization." But with their own entity linked, as it most likely would be, to Jordan, the Palestinians could not be agitating and would have no substantial Arab support if they did.

For all the world play still emanating from Jerusalem, Mr. Begin does not and by his lights cannot accept that United Nations Resolution 242, the basic framework for settlement, obligates Israel to withdraw from any part of the West Bank. In other circumstances, however, Israelis would find that 242, far from being a lever of others use against them, could become a lever they could use for themselves. The reason is that, in the American as well as the Israeli reading, 242 permits the negotiation of agreed border changes. That is surely where Israel's interest lies.

The Israeli debate continues. Mr. Begin got only 14 of 19 votes in his own Cabinet; his defense minister, Ezer Weizman, voted against him. In the Parliament he won backing from only 59 of 120 members. Other Israeli politicians, aware of his uncertain health, are positioning themselves for the battle over his succession. In brief, it is premature to surrender to despair and to say, as Israel's "peace movement" says, that the Begin policy is "a death blow to the peace process." Nor should one be particularly discouraged to find Anwar Sadat rejecting an Israeli formulation that so many Israelis do not accept themselves.

The Israelis cannot be expected to surrender substantive positions in a dialogue with Americans. For that they can reasonably demand that Egypt return to the bargaining table. The Israelis can be expected, however, to offer assurances that, if Egypt does return, what it seeks will be on the table.To tell Egypt in advance, as Mr. Begin does, the neither Israeli withdrawal nor the establishment of a Palestinian entity is available through negotiations, is to guarantee that Egypt will not come back. And for that, Israel will be held responsible.