If there is any enthusiasm in Israel over the peace agreement with Egypt, it is not evident to a casual observer. Rather, the prevailing mood seems to be one of wait and see. One young soldier to whom I talked insisted that the agreement has changed nothing-that war is still an ever-threatening reality, but this gloom does not appear to be widespread. The more sanguine tend to see the peace treaty as a constructive and desirable, but not controlling, element in the evolution that is taking place.

There are many reasons for this restrained attitude. One is the fear that Anwar Sadat's control of events in Egypt may be temporary. Another is concern over the rising tempo of terrorism originating in other Arab states, although the Begin regime is confident that its stepped-up security measures will be adequate to cope with this menace. Every step along the road to peace is complicated by innumerablel layers of hate and racial antagonism that have existed for ages. The Begin regime recognizes all these hazards, yet seems confident that progress can be made.

To a casual observer, the treaty appears to arouse more enthusiasm in Egypt than in Israel. To be sure, the Egyptians are worried by the hostile reactions of the other Arab countries. But this is clearly assessed as a lesser danger. Egypt broke away from the formerly solid Arab front against Israel because Sadat came to realize that the greatest danger to his country lay in the possibility of another military confrontation with Israel.

One yound Egyptian to whom I talked was very candid about his approval of the treaty. "I want to live," he said . "I am 26. If we had to face a series of wars, my chance for survival would be small." He went on to explain that the Egyptians have not suddenly fallen in love with the Israelis. "Animosities and misunderstandings will continue to exist," he said. "But we recognize that the Israelis are there and will continue to be there. It is better to negotiate differences with them than to fight."

I found deal of confidence among the Egyptians with whom I talked that the other Arab countries will come to similar views, not immediately, but in the long run.

No doubt the Egyptian attitude is influenced in large measure by the parlous state of the economy. I found no open acknowledgment that Egypt could profit enormously from Israeli technology, agricultural know-how and commercial enterprise. But there is talk of improving trade realtions with many countries, Israel included, as a means of lifting the economy out of its doldrums.

Probably the greatest significance of the treaty lies in the emergence of this live-and -let-live attitude on both sides.The Israelis are inclined to emphasize the enormous price they have paid for the treaty. An adviser to the prime minister on foreign affairs took me to a map on his wall to point out the strategic value of the Sinai and the settlements Israel gave up. By relinquishing a substantial part of the territory they had taken in battle, they have at least in some measure watered down Arab fears that they intend to subdue the whole of the Middle East, as so many powerful conquerors have done in the past. Sober minds must acknowledge that this is a substantial concession in pursuit of a live-and-let-live policy.

It should not be supposed, however, that this reasoning will lead to the relinquishment of all the territory taken in the war of 1967. The Israelis have agreed to autonomy for the West Bank, but that does not mean willingness to accept a hostile separate Palestinian state that, with the aid of terrorists in other countries, would be a constant menace to the security of Israel. Nor does it mean restoration of the old Syrian border along the shores of the Sea of Galilee. Effective control over the Golan Heights overlooking Galilee and including the headwaters of the Jordan River - truly Israel's lifeline - is a prime essential to the survival and stability of Israel as a nation.

The same may be said of Jerusalem. It is now the Israeli capital and is once more becoming a flourishing modern city despite the conflicting interests of Jew, Moslems and Christians in its historic sites and sacred shrines. Its improved status is dramatically illustrated by the fact that Jews are now free to pray at their Wailing Wall on the west side of Temple Mount while on top of the mount the Moslems are in full control of their famous shrine, the Dome of the Rock. When the city was divided by a no-man's land and party under the control of Jordan, Jews had no access to their Wall. Freedom for all groups is now respected, the city is growing rapidly, business is good and restoration of divided jurisdiction over its streets would be an incredible step backward toward chaos.

There is little ground for hope that the conflicting currents swirling through this ancient land can be reconciled in the foreseeable future. But it is equally unrealistic to suppose that each small faction or ethnic group can have a state of its own. That would be a virtual guarantee of chaos. Now that Israel has become a dynamic island of democracy and progress, the greatest hope for stability seems to lie in recognizing its right to exist within borders that are rational and defensible. Its borders were neither rational nor defensible prior to 1967, and it is doubtful whether it could maintain itself in its prsent hostile environment without effective control over the territory it now holds between the Mediterranean and the Jordan River.

The thrust of current history seems to be in this direction. It is inconceivable that Israel will give up what it deems essential to its own security, and it may be reasonably argued that its refusal to do so will serve the long-range interests of the entire Middle East. With all its problems, Israel is a center of dynamism and stability in a highly unstable part of the world. If it succeeds in maintaining its status and in lending know-how and stimulus to its neighbors, the critical problems of resettling refugees and guaranteeing the rights of minorities could be tackled with some hope of success. In any event, stability is a better base to work from than built-in sources of conflict. The choice seems to lie between gradual extension of the live-and-let-live atmosphere and a succession of wars threatening general disaster.