The State Department formally warned Israel yesterday that its decision to establish a new civilian settlement on the occupied West Bank just as new negotiations with Egypt are beginning could undermine the U.S. sponsored effort for a broader Arab-Israeli peace.

Issuing its first sharp condemnation of Israel since the Egyptian-Israeli peace treaty was signed in Washington March 26, the State Department termed the Israeli cabinet's decision on Sunday "harmful to the peace process and particularly regrettable at this time."

At about the same time that department spokesman Hodding Carter was reading a prepared statement containing the condemnation to reporters at a daily press briefing in Washington, U.S. Ambassador Samuel Lewis was formally registering the same protest with the Israeli government in Tel Aviv.

The condemnation was triggered by an 8-to-5 vote by the Israeli cabinet Sunday to permit the ultranationalist Gush Emunim movement to begin immediately a settlement near Nablus, a center of Palestinian nationalism for the 1.1 million Palestinians in the West Bank and Gaza Strip. Prime Minister Menachem Begin voted for approval for the settlement.

The resumption of the bitter dispute over new Israeli settlements that has flared between the two governments intermittently since the Camp David summit last September now appears to pose a serious threat to the credibility of the diplomatic process the summit set into motion.

After the summit, President Carter asserted through aides that Begin had agreed to an arrangement that would freeze Israeli settlements during the peace treaty negotiations. The arrangement was described as one that would give Arab negotiators an effective veto over new settlements during the second set of negotiations over the futute status of the West Bank and Gaza Strip territories.

Begin repeatedly has denied making any such agreement, and the cabinet decision represents a challenge to the White House version of what was agreed upon at Camp David about the settlements issue.

Hodding Carter indicated yesterday that despite Washington's concern, the United States would not pull out of the Palestinian autonomy negotiations over the settlements issue.Palestinians and Jordan's government have refused to take part in the talks.

Saying that the United States and Israel have been "putting aside our differences" over the Camp David pledge on settlements for some time, Hodding Carter added that the administration plans no action over Sunday's decision beyond the protest voiced here and repeated in Tel Aviv.

He said he had no indication that Egypt has been in touch with Israel or the United States about the cabinet decision.

In his statement, given in response to a question, Carter stressed that the Three nations committed themselves at Camp David and again in signing the bilateral peace treaty to seeking "a comprehensive settlement," a phrase the administration has used in the past to described an Arab-Israeli agreement that would secure the legitimate rights of the Palestina people.

The "most disturbing" aspect of the decision was its timing, Hodding Carter said several times. He said the United States "deeply regrets" the starting of a new settlement "at this time with negotiations just beginning that are aimed at establishing a new relationship between Israel, the West Bank and Gaza."

Begin has said the only new relationship Israel will accept at the end of the automony period, which is scheduled to last five years would be an assertion of Irael's right of sovereignty over the West Bank.

Hodding Carter said confirmation of press reports that the Israeli decision includes the confiscation of privately owned Arab landfor the settlement "wouldadd another distressing dimension to the action.

Egypt also said that it would go ahead will negiotations despite the Israeli challenge on the settlements issue. Welcoming Israeli Foreign Minister Moshe Dayan in Cairo, Egypptian State Minister Boutros Ghali said that (through more negotiations we will overcome all the difficulties" raised by "basic diagreements," including the settlements question.

Before Flying with Ghali to the Suez Canal city of Ismailia for a previously unscheduled meeting with President Anwar Sadat, Dayan defended the Israeli settlement policy at Cairo airport. "There are some very basic points in Israeli policy which we do not intend to change," news agencies quoted Dayan as saying. "We have the full right to establish settlements and maintain the unity of Jerusalem."

Egypt and Israeil are due to have a second round of talks next Monday in Alexandria on Palestinian autonomy. Dayan did not explain his visit to Sadat, but said that it was not at Israel's request.