The Middle East negotiations in Washington have led to a feud between the Israeli press and the government over censorship of newspaper accounts of Cabinet discussions on peace strategy.

Israeli journalists and editors are protesting what they call news management by the government and heavy-handed censorship of reports of political discussions in the Cabinet on security grounds.

The editors are boycotting a tripartite censorship appeals committee and, in defiance of the rules, have begun dramatizing the censorship to readers by displaying blocks of white space in the news columns where materials has been deleted.

The government says, apparently correctly, that it is acting within the law. It also argues that restraints are needed to keep the Egyptian-Israeli peace negotiations from unraveling.

To control leaks, Prime Minister Menachem Begin has been designating Cabint meetings as meetings of the Ministerial Defense and Security Committee, thereby theoretically preventing public disclosure of what takes place.

A Cabinet member can be fined or imprisoned for talking about such meetings, and reporters and editors can be similarly punished if they publish the information. In practice, those sanctions have not been imposed.

Given the competitiveness of Israel's freewhelming press and the loquaciousness of ministers who make up the coalition Cabinet, leaks are as certain as hot desert winds in July. Some ministers refuse comment when approached after the meetings, but others routinely oblige with accounts of the deliberations, with varying degrees of thoroughness and accuracy.

When that happens, the government turns, ironically, to a law that was enacted by the British government in 1933 to supress the increasingly vocal Hebrew press.

The Mandatory Press Ordinance, which was translated into Hebrew and adopted by Israel, gives the government broad powers to control the news media.

One clause empowered the interior minister to stop publication of a newspaper if, in his opinion, publication could endanger public safety by causing panic or despair.

But the law is invoked principally by the Israeli Army censor to prevent the publication or broadcast of material considered to be a danger to national security, particulary military news.

The present controversy stems from censorship of reports of Cabinet debates and votes on the Egyptian-Israeli draft treaties, and the government's instructions to its delegation in Washington.

For example, Haaretz, the Hebrew morning paper, carried a story last week by its political reporter, Uzi Benziman, under a headline that promised a reconstruction of the debate in which the Cabinet approved the draft treaty but tacked on a number of amendments.

The story was broken up by large blocks of white space indicating heavy censorship. In some cases, the narrative was interrupted in mid sentence.

Benziman wrote, "There is dissatisfaction in the Cabinet, although the new draft is incomparably better. . ." White space followed. The censor also deleted parts of the story that obviously dealt with the proposed lsraeli who opposed the drafted treaty, and the preamble language that purportedly links the bilateral pact to the future of the West Bank and Gaza Strip.

The military censor maintains offices in both Tel Aviv and Jerusalem, and publications in each city are required to submit galley proofs for approval in advance of publication. Under the rules, newspapers must run material together when sections are excised so that there is no appearance of censorship.

In practice, editors are not held accountable if the censorship is imposed close to the printing deadline and it would be necessary to remake a page to eliminate the white space created by deletions. In the case of the Haaretz story, one of the newspaper's editors said, "Nobody broke their neck trying to fix the page."

In another case, the afternoon daily Maariv, charged with violating censorship by publishing reports of a Cabinet session, was summoned to appear before the tripartite censorship committee composed of a military representative, a representative of the Daily Newspapers Editors Committee and a neutral chairman, Yeshoshua Rotenstreich, who is past president of the Israeli Bar Association.

To avoid constant litigation, the publishers and the government long ago agreed to submit disputes to the committee. The "Catch-22" in the agreement, however, is that if the military representative is outvoted, the army chief of staff can overrule the majority.

The editors committee, however, refused to send a representative to hear the Maariv case Monday. It was the first such boycott in 28 years, and Rotenstreich ruled that the committee could not legally meet. The charge against the paper was suspended.

The editors committee and the National Union of Israeli Journalists have condemned the Cabinets practice of meeting as a security committee to discuss political matters declaring that "keeping information from the public is antidemocratic and is a clear attempt to curb major political debate on essential political issues pertaining to the future of the country and the nation which have nothing to do with security issues."

Haaretz editor Gershom Schocken complained that "purely political issues" were discussed at the Cabinet meeting, and added, "Anyhow, the news got out."

The newspaper editorialized that the Cabinet was hiding "internal political differences," and that the purpose "is not a question of the security of the government."

"Look, the reason Camp David worked is that Carter put the lid on the story until an agreement was reached," an aide to Begin said yesterday. "That's all that is being done here, to prevent the publication of things that could ruin the peace talks."

The Begin aide said that for all the protests, "the government won't give in until the peace treaty is settled." He added: "It's a question of what's more important - signing a peace treaty or publishing news about the discussions of a treaty that is never signed.The time for all the reporters to do their bitching is if the Cabinet keeps it going after Camp David is wrapped up."

He acknowledged that leaks are inevitable, but said it is futile to try to suppress all disclosures. In 1975, former Prime Minister Yitzhak Rabin proposed lie detector tests for all ministers during Sinai interim disengagement talks, but the idea aroused great indignation and was dropped.

Censorship affects foreign correspondents in a somewhat differently.

Foreign correspondents who telephone their dispatches or use privately owned telex machines are required to give the censor advance notice of any material that involves state security. Purely political material, however, can be telephoned or cabled without prior examination.

Although under certain cabling conditions the censor may monitor and interrupt the transmission, foreign reporters generally get their reports to their home offices before they deliver a copy to the censor, unless military or security details are involved.

From time to time, a report that has been published abroad is censored before republication in Israel, but the government has an unwritten policy of clearing such information if it has been used by large, mass-circulation newspapers.

In the Cabinet meeting controversy, there is no way for Begin to satisfy his critics. He is attacked by liberals who charge suppression of freedom of speech. and is castigated by hard-line conservatives who say he uses the censorship laws to muzzle public discussion of what they regard as his soft policy toward the Arabs.