Secretary of State Cyrus Vance, confronted by strong Israeli opposition to new proposals for breaking the deadlock on a peace treaty with Egypt, decided tonight to end his shuttle mission Thursday whether an agreement has ben reached or not.

In an unexpected announcement made after he conferred by telephone with President Carter, Vance revealed that he will continue negotiating with Prime Minister Menachem Begin's government until late Thursday afternoon, and then fly to Cairo in hopes of a final meeting with Egyptian President Anwar Sadat. The announcement said his departure from Cairo is set for early Friday morning.

Vance's spokesman, George Sherman, refused to discuss reasons for the sudden decision to impose a cutoff on the secretary's shuttle diplomacy. This immediately touched off speculation that the United States is attempting to push Israel into making concessions necessary for reaching a peace agreement by the Sunday deadline set at the Camp David summit meeting.

The confusion caused by the murky nature of the announcement also caused speculation whether Vance and Carter have concluded that the secretary's mediation efforts have failed, or whether he is being called home to deal with other urgent diplomatic business such as the crisis in Iran.

But, in the face repeated questions from reporters, Sherman say only, "The secretary feels he will have achieved everything that he could by the time he leaves the area" and that "he has other business to conduct in Washington."

Sherman also stressed several times that Vance still has another long day of negotiations Thursday, here and in Cairo. He added: "We are not prejudging the outcome of these negotiations."

[Carter, in a speech to the Business Council in Washington, praised Sadat for being "very generous" in concessions to reach agreement on the treaty, but said nothing about Begin. This reinforced earlier indications from U.S. officials familiar with the negotiations that in the American view Sadat has gone as far as he can reach a compromise, and that the next move is up to the Israelis.]

[Reporters were summoned to the White House before the Carter speech to hear a senior official describe the developments in Jerusalem in as optimistic a light as possible. He cautioned against overdramatizing Vance's decision to return and said: "The feeling is that we will have done all we can to explain the proposals."]

Sherman's repeated insistence that the United States is not prejudicing the Israeli decision appeared to hint at the idea that Vance, by setting a flat deadline for his mission, hopes to pressure Begins' Cabinet into the greater negotiating flexbility that Washington believes is necessary to break a month-long impase in the peace talks.

Carter successfully used a similar arbitrary deadline to force agreement between Sadat and Begin last September at the Camp David summit conference. When Vance began thi sMiddle East mediating trip last weekend, it was to the accompaniment of a calculated series of statements by Carter about the urgency of meetin ghe Sunday, Dec. 17, deadline agreed to at Aamp David.

However, Vance also said originally that he was willing to keep shuttling between Cairo and Jerusalem for as long, as he and the negotiating parties felt it would be useful. When he arrived here this moarning, following three days of talks with Sadat, he gave no indication that he planned to limit his time in the area.

Nor did he give any sign of his intenjsions following a two-hour meeting early this evening during whihc he discussed with Begin and members of the Cabinet proposals agreed to by Sadat for resolving the two key problems in the peace talks.

One ominous note was the sudden departure of Defense Minister Ezer Weizman, who said he was going to Tel Aviv and not participating in a Cabinet Defense and Security Commitee discussion of the proposals. Weizman, one of the two chief Israeli negotiators in the peace talks, is generally thought to favor greater accommodation by Israel to wrap up the treaty quickly.

He was followed out of the meeting by Vance and Foreign Minister Moshe Dayan, the other chief Israeli negotiator. In talking with reporters, both took a calm, low-key stance.

"It was a friendly discussion," Vance said. "It was a thorough discussion. There area differences of views between us, but we will be continuing our discussion tomorrow morning."

To which Dayan added: "We heard from the secretary of state the Egyptian views, his views, the American administration's views, and we have to study them. We shall do part of it now, and we shall continue with the talks tomorrow morning. It's really too early to say anything about it yet."

The two then went off to a dinner hosted by Dayan. Within the hour, however, rumours began circulating and reports were being broadcast on the state-owned Israel Radio that there was a strong opposition within the Cabinet tot he ideas trought by Vance from Cairo.

Then Sherman, who earlier had annoucned plans for Vance to go toEgypt on Friday and who had said there was no set date for secretary's return home, summoned reporters to reveal Vance's talk with Carter and the resulting change of plans.

The problems that brought Vance to the Middle East involve Egypt's insistence on two points that so far have been rejected by the Israelis.

One is Sadat's demand that the treaty be accompanied by a timetable for separate negotiations to bring about Palestinian autonomy in the Israeli-occupied West Bank and Gaza Strip. The other is Egypt's concern that an article in the draft text, which states that the peace accord takes precedence over all other treaties of the two countries, would bar Egypt from aiding other Arab countries that became involved in conflicts with Israel.

In Cairo, Vance is known to have convinced Sadat tentatively that these problems can be resolved through explanatory documents accompanying the treaty. Although the rpecise details of the proposals worked out with Sadat are not known, their general outlines have been revealed by sources familiar with the negotiations.

According to the sources, the time-table on Palestinian autonomy negotiations would be phrased to make it clear that it involces target dates rather than inflexible deadlines.

Jregarding the issue of the treaty's precedence, te proposed solution reportedly would involve appending to the treaty an explanatory note reiteraring right of all nations under the United Nations charter to defend themselves in case of attack.

By implication, that would extend to Egypt's defense treaty obligations to its Arab allies.

Sources here say, however, that important elements in the Begin government regard these ideas as potential back-door ways to dilute the treaty and allow Egypt to abrogate it if the Palestinian timetable is not met of if Israel gets into an armed conflict with another Arab state.

As the talks went on, Israeli officials reacted sharply to Senate majority leader Robert C. Bryd's warning in Washington that Congress would be reluctant to approve large-sclae economic and military aid to Israeli if Israel holds back on granting full automy to West Bank Palestinians or increases the number of its settlements in territories it has occupied since the 1967 war.

Moshe Arens, chairman of the Knesset Foreign Affairs and Defense Committee, said he interpreted Byrd's remarks as "direct overt pressure", and urged the Israeli Cabinet to obtain a U.S. commitment for financial assistance before signinng a treaty.

"I have no doubts that Sen. Byrd would have issued that statement on his own," Aren said, stressing that the estimated $3 billion cost of redeploying Israeli air bases in the Sinai Peninsula must be born by the United States.

Knesset member Abba Eban, former ambassador to the United Nations, called Byrdhs statement "a gross violation of the whole tradition under which our two nations have cooperated in the past." CAPTION:

Picture 1, Cyrus Vance, left, with Israel's Moshe Dayan tells reporters differences remain in treaty talks. AP; Picture 2, Secretary of State Cyrus Vance, far left, meets with Israeli officials, from right, Menachem Begin, Moshe Dayan and Ezer Weizman, in Jerusalem. UPI