Abdel Ghani Karar, a major general in the Egyptian national police, runs a government in exile inside his own country.

He is the acting governor of the Egyptian province of the Sinai - whose almost forgotten administration has continued to function through the 11 years since the Sinai Peninsula and most of its population were captured by Israel.

The governor's office is on a quiet street in a Cairo suburb, behind a sign that says: "Military Area, No Photographs." But Karar says it will not be there long. The capital of the Governorate of Sinai, he said in an interview, will soon return to El Arish, on Sinai's Mediterranean coasts, where it was before the Egyptians were driven out.

"Not one of us expected this to happen," he said of the Camp David accords that provide for return of the Sinai to Egypt. "For anyone from the Sinai, this is a great success."

He said 80,000 Sinai exiles live west of the Suez Canal and "they all want to go back. Their families are still there."

Throughout the occupation, Egypt has never accepted any suggestion that the Sinai is other than an integral part of this country. The 1976 census included 147,000 residents of the "occupied zone" as residents of Egypt.

The Sinai exiles living west of the canal are considered legal residents of the Governorate of Sinai, and it is that administration that issues their license plates and run their schools, clinics and sports programs.

Many public services actually are better for the Sinai people than for other Egyptians, because "everyone helps us. They know how these people have suffered."

Since the 1975 disengagement agreement with Israeli, the Sinai governorate, staffed by Sinai residents who work in the Suez Canal town of Qantara, also has administered the wedge of Sinai that was returned to Egyptian control and has arranged family visits that bring residents of the occupied zone across the Suez Canal for a month at a time.

Sinai even has two representatives in the Egyptian parliament. One represents the workers of the Abu Rudeis oil fields. The other is the only member of the Egyptian parliament who wears Saudi-style robes, a reminder that the people of Sinai, unlike other Egyptians, are mostly bedouins. They roam the desert with their camels and goals, largely indifferent to the comings and goings of government.

Karar said one of the first tasks facing the provincial administration when it returns to Sinai will be to construct settlements for the returned exiles. Their years of living in towns and fixed camps west of the Suez Canals, he said, have broken their nomadic pattern and they are unlikely to go back to wandering the desert looking for water.

Beyond that, Karar, like other Egyptian officials, speaks optimistically about the possibility of developing the Sinai into a productive part of Egypt. Western experts have cautioned that apart from oil, the Sinai has little potential, but the Egyptians are not listening.

Karar said agricultural students from the University of the Suez Canal have shown on an experimental farm that the soil of Sinai can produce medicinal plants for Egypt's pharmaceutical industry.

The Ministry of Irrigation is talking about running water pipes under the Suez Canal to carry in fresh water and irrigate 800,000 acres. The old Israeli fortifications on the Bar-Lev Line are talked of as tourist attractions, as are the beach resorts the Israelis have developed on the peninsula's coasts.

Egyptian officials say they have an understanding that Israel will leave these facilities intact when it withdraws, as it will the military air bases that are to be turned over to Egypt and converted to civilian use.

The real key to the future of the Sinai, Karar said, lies in the highway tunnel that is under construction beneath the Suez Canal near the city of Suez. This road link between the Sinai and the rest of Egypt will make possible development and exploration of the Sinai that could not be economically undertaken in the past, Egyptian officials believe.

Since the Camp David accords require construction of a road linking the Sinai to Jordan and Saudi Arabia across the southern tip of Israel, it is suddenly possible to envision development of a heavily traveled route carrying tourists and Moslem pilgrims between Cairo and Jeddah through a wasteland that has been mostly empty throughout history.

"The main thing for the life of the Sinai is that tunnel," Karar said. "The Sinai will no longer be separated from Egypt."