Egypt can isolate but cannot be isolate," President Anwar Sadat said the other day of the Arab leaders who met at the Baghdad summit to oppose his moves toward settlement with Israel. Brave words, but more useful for internal consumption than as an accurate description.

For while Egypt is still moving toward settlement with Israel, the Baghdad summit has had an undoubted effect. The Arab radicals have won over some moderates in a way that steepens the path to peace.

Geography, to be sure, puts Egypt at the center of the Arab world. It has the biggest population by far and the strongest army. It has led the Arab world for years in its fights with Western and Russian imperialism, and against Israel.

The Egyptians also provide the Arab world with much of its modern diet. Egyptian teachers and technicians work from the Persian Gulf to North Africa. Egyptian movies and television dominate the Arab market. "We do everything for the other Arabs except take them to the toilet," one Egyptian said to me the other day.

Given that superior attitute, President Sadat raises his domestic popularity by scoring off the radical Arabs who resisted through the so-called "rejectionist" front his moves toward peace with Israel. Ordinary Egyptians lap it up when their leader berates the Syrians for shedding the blood of other Arabs in Lebanon. They love to hear him attacking the Algerians for fighting the Moroccans with Russian guns in the Sahara. They like it when he charges the Iraqis with sitting on their hands during the 1973 war. They're pleased to have him label the Libyan and North Yemenites "tools of Moscow."

Sadat even has considerable leverage on his most important Arab source of funds, Saudi Arabia. Not only do the Saudis depend upon Egyptian technicians and the Egyptian military, but also the last thing they want is that Sadat be replaced by a radical regime. In a sense - and Sadat knows it - the Saudis need him as much as he needs them.

So the Egyptian president thumbed his nose at the Baghdad summit. He airily refused to receive the delegation sent by the summit conference to Cairo. He turned down invitations to go to Baghdad that were passed on by the Saudis. And he moves forward toward peace with Israel.

Still, Beghdad plainly registered some slippage toward the radical camp by moderate Arabs supposedly friendly to Sadat. King Hussein of Jordan, the first moderate to accept an invitation to Baghdad, has come away with promises of $1 billion in aid over the next five years. That will dim his enthusiasm for getting into the settlements act set up by the Camp David accords.

Prince Fahd of Saudi Arabia went to Baghdad despite some feeling in Egypt that he would sully his reputation by keeping such company. He did nothing to stop the dispatch of a delegation to Cairo that Sadat was bound not to see. He approved subsidies to be paid to major enemies of Egypt (notably Syria and the Palestine Liberation Organization) as well as to Hussein.

Some thoughtful Egyptians even discern the workings of a typical bit of Saudi deception. According to this view, the Saudis are genuinely annoyed with Sadat for not consulting with them in advance on Camp David. They do not want to show it for fear of direct confrontation with him, and pressure from the United States, so at Baghdad they simply let the Iraqis do the job of sabotaging Camp David, while pretending to sit by helplessly.

If so, they have acted thoughtlessly. For the Baghdad summit was a shot in the arm to the troublemakers in this part of the world; temporarily, at least, the green light is on for terrorist attacks, attempted coups and the making and unmaking of new combinations and alliances.

Egypt, as a result, is now under pressure to prove it is not an American-Israeli stooge. One reason two leading members of the Egyptian delegation to the Washington peace talks returned to Cairo this week was so they could go through the motions of consultation in a way that shows this country making its own decisions.

In addition, the Egyptians are now under heavier pressure to link the agreement with Israel to progress toward Palestinian autonomy in the Gaza strip and the west bank of the Jordan. The Egyptian representatives now returning to Washington will almost certainly be taking a tougher position on linkage than before.

There is still no better alternative for Egypt - and, of course, Israel and the United States - than moving ahead along the Camp David line. But more regard for Arab sensitivities is in order - and much more wariness about relying on Jordan and Saudi Arabia.