THE RESIGNATION OF MOSHE DAYAN, Israel's foreign minister, is a vote of no confidence in Prime Minister Menachem Begin's floundering government. Mr. Dayan had agreed with Mr. Begin that West Bank and Gaza Palestinians should be offered "autonomy." But where the prime minister insisted that autonomy be tightly limited -- a demand virtually bound to ensure that Palestinians would have no part of it -- Mr. Dayan wanted it to be board and explandable, the better to draw in Palestinians over time.
As events sharpened this difference, Mr. Dayan was increasingly cut out of the action. With the bent for maneuver that had won him military renown, he tried a flanking movement, hinting at readiness to deal with the PLO provided it "alter its goals" and extending contacts with PLO sympathizers on the West Bank. His resignation may be taken as evidence of Mr. Begin's determination that this tactic fail.
Mr. Dayan has cancer. If he stays active, he could lend his considerable personal weight to those elements who fear that Mr. Begin is leading Israel into an increasing and increasingly costly and perilous international isolation. Regardless, those elements will continue to ask why Israel cannot expore more purposefully whether there is a viable political alternative to an otherwise open-ended war.
True, the PLO, with its terror and with its diplomacy aimed at wielding the oil weapon rather than at inducing accommodation, has often seemed determined to make Menachem Begin look good. But there exists in Israel a body of opinion ready, partly for tactical reasons and partly for substantive ones, to discuss a solution with any Palestinian who will recognize Israel and abandon terror. Events could yet make this body a political force.
The Carter administration, eager to push the stalled Israeli-Egyptian autonomy talks, wonders if it should or could take advantage of the Dayan resignation. The answer is no. Israeli politics is too volatile and Israeli nationalism too inflammable to offer American diplomacy any good choice but to stay on course and continue trying to breathe life into the Camp David autonomy formulas.
There is a movement is Israeli opinion. The high court's unprecedented decision yesterday barring the seizure of private Arab land for a Jewish settlement in the West Bank is part of it. The summer-long debate over whether members of parliament should attend the "New Outlook" Israeli-Palestinian symposium, to be held in Washington this weekend, is a second part. Mr. Dayan's resignation is a third part. The United States should let it develop on its own.