An Israeli Foreign Ministry spokesman said yesterday that the Cabinet "could be expected" to reject Egyptian President Anwar Sadat's latest Middle East peace proposal when it considers the plan on Sunday.

Following a nearly two-hour meeting of the senior staff of the ministry including Foreign Minister Moshe Dayan the spokesman methodically dismantled each provision of the plan. Saying that it "is so far away from what Israel will accept that it is forcing the United States into submitting a peace plan."

However the spokesman and other high ranking officials said that Dayan still will travel to London later this month for foreign ministers meeting that will include Egyptian Foregin Minister Mohammed Ibraham Kamel and Secretary of State Cyrus Vance.

While high-ranking Israeli officials privately assailed the Sadat proposal when it was received here Wednedsay. Yesterday was the first time Israel officially indicated that it will reject it before the London meeting.

The spokesman, who attended the senior staff meeting, said the consensus of the meeting was: "Why should Sadat submit something that he knows, we know and the United states knows is unacceptable."

The spokesman said that while no formal announcement will be made before the Sunday Cabinet meeting "total rejection" of the peace plan "could be expected" then. Asked whether the senior ministry staff debated the merits of withholding a rejection until the London meeting he said, "there was no suggestion of that."

Later, a higher-level official said Israel "has not denied nor do we now deny the right of Egypt to present and negotiate its proposal," even though the government regards it to be a "bad dream."

Under Sadat's latest plan. Israel would withdraw its military forces and Jewish settlements from the West Bank and the Gaza Strip, and Jordan and Egypt would administer the two areas, respectively, while the Palestinian Arab would determine their own future during a five-year transitional period.

The foreign Ministry spokesman and other Israeli officials yesterday were particularly critical of the absense of any specific reference to a peace treaty, although the preamble does refer to a goal of a "just and lasting peace." They pointed out that previous peace negotiations at Ismailya and in Jerusalem included prominently the notion of agreeing to a peace treaty.

They also noted that under an earlier Egyptian formula, references were made to the "legitimate rights" of the Palestinians and the "participations" of them in determining their own future. But in Sadat's new proposal, the language was changed to read that the Palestinians "will be able" to determine their future after the transitional period.

The Israeli officials also complained that in previous peace talks, the Egyptians brought up the problem of Palestinian refugees in the context of U.N. Security Council Resolution 242. Now, they said, this had been changed to apply to all "relevant" resolutions dealing with the refugees, including many that have been rejected by Israel over the past 30 years.

The Israeli raised other objections based on two days of examining the plan, including one to the requirement that Israel abandon all Jewish settlements in the occupied territories. They asked whether that would include Gush Etsion, which had been a Jewish settlement before the 1948 war of the independence.

Despite the sharp criticism, the Israeli officials said there are several areas in the plan that leave room for negotiation. They noted that the United Nations is included in preliminary negotiations on the timetable of withdrawal, border security arrangements and other key issues and that the U.N. also would supervise the withdrawal and the restoration of authority in the areas.

They said they were encouraged that there is no mention of the Palestine Liberation Organization nor of a Palestinian state, but one official said, "when one reads this paper this appears as a possibility for the future of the West Bank and Gaza."

"By and large, this appears to be an attempt to play into the hands of the United States. This is the sort of a plan not to get an agreement but to get a rejection and to get the Americans involved," said a source close to Dayan. He added, "But we will go to London nevertheless. We don't want to leave anything untried. But I am not very hopeful."