Israel's Cabinet bluntly rejected the U.S. supported Egyptian amendments to the draft treaty today, saying that responsibility for a stalemate in the Middle East peace negotiations rests squarely with Egypt and, by implication, the United States as well.

In a distinct downturn in the peace process, Israeli Foreign Minister Moshe Dayan said there "definitely is a realistic possibility" that there may be no peace treaty with Egypt.

Setting the stage for a confrontation with the Carter administration the Cabinet said it "rejects the attitude and the interpretation of the United States government with regard to the Egyptian proposals."

Prime Minister Menachem Begin said, however, that Israel is prepared to sign "without delay" the U.S. supported draft treaty as it stood on Nov. 11, before Egypt - with Secretary of State Cyrus R. Vance's sanction - tacked on a series of proposed side letters.

[U.S. officials returning to Washington with Vance clearly were angered by the Israeli criticism and a senior official charged there were inaccuracies in Israel's characterization of the rejected proposals.]

The side letters opposed by Israel affirm a relationship between the bilateral Egyptian-Israeli pact and the establishment of autonomy for Palestinians on the West Bank of the Jordan River and in the Gaza Strip.

The proposed side letters would make an exchange of ambassadors conditional upon the implementation of Palestinian autonomy; provide a "review" of Sinai Peninsula security arrangements after five years; set a "target date" for the start of autonomy on the West Bank and in Gaza, and dilute somewhat a clause assuring that the treaty would supersede mutual defense pacts between Egypt and other Arab states. "These demands are inconsistent with the Camp David framework, or are not included in it and change substantially provisions of the peace treaty. Therefore, they are unacceptable to Israel and are rejected by it," Begin announced after the five-hour Cabinet meeting.

The tone of finality in the Cabinet communique, in spite of Begin's assurances that Israel is prepared to resume negotiations, is certain to exacerbate tensions between the Carter administration and the Israeli government.

Dayan, in an interview on Israeli television, was asked whether a situation could develop in which the peace treaty would not be signed. "Such a situation could definitely develop," he said. "We have reached the limit of our concessions . . . If they [the Egyptions] will now withdraw their consent and refuse to sign, there will be no peace treaty. That definitely is a realistic possibility.

He added, "In the final analysis, Israel cannot be forced to accept what it is not willing to accept. There may be [American] pressures - public opinion pressures, perhaps also economic pressures. But if Israel will stand up to these pressures, firmly and united, it will not only have a chance - but it may be assured - that what it will no wish to do, it cannot be forced to do."

Speaking with reporters after the Cabinet meeting, Begin was critical of what he termed the U.S. government's "one-sided attitude" in support of Egypt's position, and suggested it stems from pressures exerted by radical Arab states following last month's Arab League Conference in Baghdad.

"I only wish to express the hope that everybody in the United States, the government, Congress, public opinion . . . will understand that exactly because of the latest developments, it is necessary from the point of view of the real interests of the free world to strengthen Israel and not to weaken the state of Israel," he added.

Cabinet sources said Israel's rejection of the Egyptian amendments was a foregone conclusion even before Vance left here yesterday, interrupting a week of diplomatic shuttling between Cairo and Jerusalem in which he had hoped to pin down the final details of an Egyptian-Israeli peace treaty.

Even though Begin and several ministers told Vance they would not accept the Egyptian proposals, he asked that U.S. Ambassador Samuel Lewis be informed immediately of the Cabinet decision so that he could be informed while airbourne en route from Cairo to Washington.

Before leaving Cairo this morning Vance met with Egyptian President Anwar Sadat to inform him of the informal reaction yesterday of Begin and seven key ministers who make up a Defense and National Security Committee.

Just hours before the start of today's Cabinet session, however, Carter said in a television interview that "we have worked out with Sadat on approval by him" a final treaty text, and that "the decision rests primarily now with the Israeli cabinet."

Shifting responsibility for the success or failure of the peace negotiations to Israel has embitted many Israeli government policymakers, some of whom complained today they are more upset with the United States than with Egypt.

"The delegation that has changed its mind the most is not the Egyptians or the Israelis. It is the American delegation," said one aide close to Begin.

The Israeli view is that on Nov. 21, the Begin government stood up to considerable internal political pressure and voted to accept the U.S. sponsored draft compromise, which ostensibly contained compromised demanded by Egypt, including a vaguely worded "link" between the Sinai agreement and the future of the West Bank and Gaza.

Then Egypt, under pressure from other Arab states, "upped the ante" with four additional demands, according to the Israeli perception, and the United States gradually came up to the conclusion that to keep alive prospects for Jordanian and Saudi Arabian acquiesence of the peace process it would have to stand behind Egypt's amendments and force additional compromises by Israel.

Referring to Vance's endorsement of the new Egyptian proposals, Begin said today, "We were taken by surprise."

When asked whether the Cabinet's rejection meant a halt to the peace talks, the prime minister said, "These points are rejected. It is as simple as that. But we do not negate any negotiations in the future.

"We expect that the consultations, the negotiations will be resumed . . . We want to sign a peace treaty with Egypt. We want a settlement in the Middle East. We haven't changed our attitutes whatsoever. If I should be invited for a summit conference, I surely will reply, 'yes.'"

Several of his advisors said Israel is not opposed in principle to a "target date" for implementation of Palestinian autonomy, but that Israel is against such a schedule if it is intended as a link between the Sinai treaty and the West Bank.

Begin said the Cabinet decision against setting an autonomy deadline was unanimous, and that rejection of the other Egyptian amendments, while not put to a formal vote, reflected a "concensus" of the ministers.