NOT WITHOUT some jostling, the negotiation of an Egyptian-Israel peace treaty is proceeding apace. Jimmy Carter personally helped negotiate the compromise draft that both governments have now approved, Israel with certain amendments; Egypt demands some alterations, too. In gaining Cabinet approval of the draft, as in the Knesset vote terminating the Sinai settlements, Menachem Begin has been ready to put the drive for peace ahead of political loyalties cemented over 40 years. The two negotiating teams are again back at full strength in Washington, and they hope to complete a treaty by the anniversary of Anwar Sadat's Jerusalem visit on Nov. 19.

That is, in our view, the proper and positive context in which to view the latest flap over Israeli settlements in the West Bank. Mr. Begin, to keep his opposition from spoiling the treaty with Egypt, wanted to show there was no literal or direct linkage between Israel's decision to evacuate the Sinai and its determination to hold on to the West Bank and Gaza, under new conditions, pending future negotiations. Evidently he also wanted to retort politically to statements American diplomats have made to Jordan and West Bank Palestinians to draw them into those later talks. Both purposes were served by his announcement that Israel will expand some existing West Bank settlements. The State Department pronounced itself "deeply disturbed."t is three-level charade. First, the Israeli announcement was entirely political, and, given that only a handful of those Israelis claiming a right to settle in the West Bank actually wish to live there, it may not lead to any new settlers. Second, the protests are also political, and there is no reason to think that progress toward an Egyptian-Israeli peace treaty will be slowed. Finally, the logic of events will in time almost certainly produce an accomodation on the West Bank anyway. This is likely, no matter whether Israel makes provocative remarks on settlements or Palestinians decry Camp David or King Hussein holds himself aloof, as all are doing now.

The really important development right now has to do with the attitude not of Israel or Egypt, but of Saudi Arabia, Egypt's principal patron and banker. The Saudis, it appears, are coming around to a position of support for Anwar Sadat's peace policy. There's keeping the money flowing and trying to restrain attacks by other Arabs. They have just agreed, for the first time in 30 years, to let Israeli Arabs make the pilgrimage to Mecca. That is inadequate to those who insist upon nice, neat, hard edges on their politics. But it will be of great help to Mr. Sadat in standing up to the more radical Arabs' attempts to drag him down. The peace process, in brief, continues to move ahead.