This is a holiday week in Egypt. The country is celebrating the 26th anniversary of the revolution that toppled the monarchy and led to Gamal Abdel Nasser's rise to power.

It is an occasion for Egyptians to think about their country and the revolution's accomplishments, or its failings. President Anwar Sadat, Nasser's successor, is scheduled to deliver a major speech Saturday that will deal with the economic and political problems besetting this overcrowded and turbulent nation.

Cairo's newspapers are giving extensive coverage to the peace negotiations with Israel that are taking place in Briain under American auspices. It seem safe to say however, that most Egyptians, who believe Sadat's peace initiative has failed to produce any results and cannot produce any so long as Menachem Begin is prime minister of Israel, have other things on their minds.

In short, Egypt this summer looks much like Egypt last summer and the summer before that, almost as if Sadat had bever gone to Jerusalem. The euphoric hopes aroused by that trip faded almost as quickly as they arose.

As expressed in an editorial in the newspaper Al Ahram, Begin "wants land, security and peace, but he does not try to rise to the level of this history making event." That being the prevailing view, Egyptians - who followed every detail of Sadat's visit to Jerusalem on their television sets - are paying considerably less attention to the talks in Britain.

Those who can afford it have gone to Alexandria, on the Mediterranean coast, to escape the heat of Cairo.

In Upper Egypt, police and clergy are trying to cool off a new series of disputes between the overwhelmingly Moslem population and coptic Christians. The police are also trying to cope with reappearance of the opium poppu in the fertile fields along the upper Nile.

Orthodox Moslem students from Cairo University have occupied a mosque in a weeklong sit-in. They are protesting against the decision of a nervous government to move their annual summer religious camp outside Cairo & a reminder that Sadat fears the threat of the conservative Moslem right even more than he does the intellectuals and Nasserities of the left.

No mention of this incident, or of the religious tension in Upper Egypt, has appeared in the newspapers. This has brought new criticism from the intellectual classes that Sadat, by cracking down on political dissent and further taming the press, is acting more like Nasser all the time.

A matter of real and immediate interest, unlike the abstraction of the talks at Leeds Castle, is the efficiency campaign of Prime Minister Mamdouh Salem, who has taken to dropping in unannounced on government offices to see how they are serving the public. At Cairo's main railroad station, he embarrassed officials by finding scrap iron that had been designated for sale since 1900 and rousing workers dozing on used linen from sleeping cars.

Salem himself is again rumored to be on the way out, a rumor that has been around longer than the peace initiative.

Egyptians generally hold out little hope for real progress toward peace, at Leeds Castle or anywhere else, and seem to agree that Sadat had mismanaged his offensive.

The President, one said, is "standing on one foot, like Nasser," meaning that Sadat has become as dependent on the United States as Nasser was on the Soviet Union, limiting his freedom of maneuver.

"Sadat's timing was wrong," a retired officer said.

But the Egyptian system, unlike that in Israel, provides no real channel by which this grumbling can translate itself into pressure to alter his policy.

There is in any case no equivalent here to the internal Israeli debate over what concessions to offer in exchange for peace. Virtually everyone agrees that it is Israel that must yield the occupied territories, not Egypt that must compromise.

Even if the critics disagreed with Sadat on substance as well as tactics, they could not exert the kind of pressure on him that Begin feels from his parliment. Foreign policy here is set by one man. Sadat cannot be brought down by the loss ofa parliamentary majority and is answerable to no one but the army for his decisions.

So, while the criticism continues, it is unfocused and unorganized. Meanwhile Sadat and his foreign policy team, the few who really know what is going on, take a different view of the Leeds Castle talks, which they regard as more than an empty exercise.

In the Egyptian view, according to informed sources, Israel had gained to two tactical advantages over Egypt in the months since direct negotiations were broken off last January. The Israelis pointed out, correctly, that it was Egypt, not Israel, that walked out of the political talks in Jerusalem and that it was Israel, not Egypt, that had submitted the only detailed peace proposal.

By publishing their own proposals and carrying them to the Israelis at these talks, the Egyptians believe they have swept away what they regard as Israeli excuses for temporizing on the real issues.

Furthermore the very nature of the talks in England indicates a major shift, if not concession, in Sadat's approach. In the past, he insisted that agreement on a "declaration of principles," including full Israeli withdrawal from the occupied territories, had to precede negotiations on any proposals for implementation.

Now he is instructing Foreign Minister Mohammed Kamel to try it the Israelis' way, talking of security guarantees and the nature of Palestinian autonomy before the Israelis commit themselves to an eventual pullout.

This may not persuade Begin to offer anything new, the Egyptians are said to believe. But it could open the way for what they have long believed is the only real move that could break the impasse - the submission by the United States of its own proposals.

News that Secretary of State Cyrus Vance is coming back to the Middle East next month is sure to fuel that hope.

While Vance's trip will get banner headlines in the Egyptian press, it is unlikely to turn up the emotions of the Egyptians to the level of last winter. The months and meetings that have gone by since then with no result seem to have left the populace discouraged not just about Israel but about the U.S. role in the talks.