There is no celebration of peace in the cities and dusty market towns of the West Bank.

In Bethlehem, Mayor Elias Freij, often held up by Israelis as a model of propriety, expressed suspicion and disappointment over the Camp David accords between Israel and Egypt.

In Hahlul, just north of Hebron in the Judean hills, the high school has been closed for two days after a clash and the town's 12,000 inhabitants have just come off a curfew imposed by the occupation government and enforced by Israeli soldiers with submachine guns.

"We never gave Egypt power of attorney," Freij complained, expressing a view shared by many Palestinians in the West Bank."What was produced at Camp David is a complete victory for Egypt and a surrender [of Palestinian rights] to Israeli demands. Once the treaty is signed, our chances of getting anything will be almost nil."

Freij's complaints and those of other mayors in Arab towns as well as the confrontation here are indicative of the simmering resentment, disillusionment and profound feeling of isolation with which the West Bank has reacted to the Camp David accords.

The mayors also predict that is unlikely that anyone of political stature among the West Bank Arabs will cooperate with Israel's plan for an autonomous Arab government in the occupied territory.

Less than 15 miles north of here, in Jerusalem, Israelis are taking excitedly about peace with Egypt, a planned exchange of ambassadors and a bus ride to Cairo advertised for about $8.35.

But in Halhul, the sleepy pace of a rural town on a warm autumn day masks a resentment over the latest confrontation with the occupying authorities.

As in almost all army-civilian clashes on the West Bank, there are widely differing versions of what happened in the disturbance here Sunday.

The Israelis say that a group of students were stoning passing cars on the narrow highway that runs through town, and that some of them were arrested and taken to the military governor's headquarters in Hebron for questioning.

Townspeople and several teachers say that about 20 seventh and eighth grade students were peacefully protesting the arrest the day before of another group of students, but that they obeyed a teacher's command to return to their classes.

Then, according to one teacher, an army officer followed the boys into their class saying, sarcastically, "Ah, so you are learning." According to some eyewitnesses, the troops emptied the school herded 600 Arab youths into a small courtyard and ordered 20 to the military headquarters.

When a large group of mothers and schoolgirls angrily broke into the courtyard, the Palestinians said, the army closed the school and declared a day-long curfew under which stores were shut and produce traders were prohibited from loading the day's harvest to be trucked to Amman.

By itself the incident and the army's reaction were not extraordinary, although the army has been under orders to avoid entering schools ever since 50 Israeli soldiers surrounded an Arab school in nearby Bert Jala in April, ordered the students to close the windows and then lobbed tear gas cannisters into the classrooms. Ten students were hospitalized when they jumped from the windows, and the military governor of the West Bank was fired in the ensuing controversy.

But the incident here Sunday illustrates the tension between Israeli Army forces who feel they are administering a lame-duck occupation, and the West Bank Palestinians, who feel their cause has been forgotten amidst the euphoria of imminent peace between Egypt and Israel.

The occupying soldiers' frustration is heightened further by their traumatic experience of having to battle hundreds of ultranationalist Jewish settlers who, as a protest to the Camp David accords, have been erecting illegal settlements on the West Bank as fast the army can hear them down.

The Palestinians' disillusionment is intensified by their suspicions that Israeli Prime Minister Menachem Begin, once having signed a peace treaty with Egypt will revert to his hardline stance on the West Bank and that the only winners in the whole affair will be Egypt and Israel.

In his spartan office next to a produce store here, Halhul Mayor Mohammed Hussein Milhem recalled that during Sunday's disturbance he was in East Jersalem's American Colony hotel meeting with several other moderate Arab West Bank leaders and two visiting officials from the U.S. State Department.

By Milhem's account, the U.S. officials told the Arabs not to forget that for years Begin had vowed to never abandon the Israeli settlements and air bases in the Sinai Peninsula, but now they are about to be abandoned. The implication was clear: the Sinai precedent should not bode all ill for West Bank Arabs.

Milhem, although firm in his defense of Palestinian rights, is regarded in Israel as a thoughtful, relatively moderate Arab mayor. Although he insists on a Palestinian state and regards the Palestine Liberation Organization as the only legitimate representative of West Bankers, he openly accepts Israel's right to exist peacefully and he is not given to proposing solutions that he knows Israel considers a threat to its survival.

Milhem is not encouraged by Camp David, and neither are many of his moderate colleagues in positions of West Bank leadership.

"I am talking to people all the time, and in the Camp David agreements the Palestinian people feel that there was nothing to meet even the moderate Palestinian needs. What is self-rule without any commitment by Is-

Milhem said he sees little difference between Begin's original plan of limited autonomy and the Camp David framework for peace. Neither satisfes the removal of the settlements and neither calls for total Is-

As for the U.S. officials' assurances of a Sinai precedent, Milhem said. "We are suspicious because of our experience with Israel over the last 11 years. The West Bank and Gaza Strip are something different to Israel than the Sinai. They are part of 'Eretz Israeli withdrawal from the West Bank, he said.

Also, he said, the contradicting statements by President Carter and Begin on the length of Israel's freeze on new West Bank settlement increased many Palestinians' suspicions.

Ten miles north, in Bethlehem, Mayor Freij still maintains that the peace accords are important and deserve further scrutiny, but there is no disguising his disdain for what happened at the summit conference.

He insists upon the same conditions that many other mayors are demanding - a withdrawal commitment, an end to settlements and total self-determination.

"After they sign the treaty with Sadat, Israel will intensify the settlement activity. Yesterday in the Knesset, they said no to a referendum, no to a Palestinian state, no to withdrawing settlements and no to withdrawing their army. What kind of compromise is that?," Freij asked in an interview.

Is the Israelis attempt to unilaterally impose limited Arab autonomy, Freij said, "they could find some colaborators, but none of the mayors. I'd be the first not to participate. They will not find enough to run the government."

A number of West Bank leaders are known to have been summoned to Amman recently and urged not to participate in any Israeli self-rule plan. It is assumed that similar pressure is being exerted by the PLO.

Freij's remarks appeared to have special significance because he was one of several West Bank Arab mayors who were calld to Israel while on speaking tours in the United States and urged by the Israelis to hold consultations over the West Bank accords.

"Naturally, I feel left out. Tommorrow the Knesset will endorse the framework, after the (Rosh Hashana) holiday they will negotiate with Egypt again, and by Nov. 19, they will sign a treaty. Where does that leave us? The Egyptian-Israeli train is going to keep running," Freij said.

"We are facing the most dangerous situation in our lives. We have to have a program of action, and we have no program," Freij said. Asked whether the PLO would be included in the program, he said, "no solution can be worked out without the approval of the PLO. Any leaders who ignores the PLO ignores reality."

wWhile the reactions of some of the moderate leaders was somewhat surprising, the militant mayor's reactions were not.

Bassam Shaka, mayor of Nablus and one of the West Bank's most ardent PLO supporters, recalled that the day after the Camp David summit talks ended, a reporter from the Hebrew language newspaper Haaretz, called and asked for reaction.

"I asked for some details of the agreement and already at that time I knew that my position on the issue was absolutely negative," Shaka said, meaning that if he had to ask he could not have been involved.

Shaka said that although the Wests Bank has no central leadership, because the PLO is headquartered in Beirut, the majority of residents will continue to oppose the agreements and will not participate in an imposed autonomy plan.

"They are all agreed. The price of the settlement between Israel and Egypt was paid by the Palestinians," Shaka said.