President Carter, beset by a string of foreign policy setbacks, will welcome Egyptian President Anwar Sadat here tomorrow for the first stage of an attempt to change his luck by pumping new vigor into the stalled Middle East peace process.

Sadat is to be followed a week later by Iraeli Prime Minister Menachem Begin. For Carter, their visits are an opportunnity of almost make-or-break dimensions to pull off the kind of diplomatic triumph he badly needs to arrest rapidly eroding confidence in his conduct of U.S. foreign policy.

Conversely, if Carter fails to jog the Egyptian-Israeli negotiations out of what is widely regarded as a limping stagger toward collapse, the result is likely to be a rapid acceleration of the president's plunging credibility domestically and abroad.

The talks, which concern the future status of lands taken by Israel in its past wars against the Arab world, have been snagged for almost 10 months over issues whose negotiating subtitles -- land, water, security, administrative power -- contain only the barest hint of the emotion and controversy they provide among both Arabs and Israelis.

As one of Sadat's chief advisers, Osama El-Baz, told reporters in a meeting here last week, the negotiations so far have made no progress beyond forming a string of subcommittees to wrestle with "purely procedural" issues.

For Carter, the stakes in these talks involve nothing less than the future of his greatest foreign policy achievement -- the dramatic process that began at his 1978 Camp David summit meeting with Begin and Sadat and that led to last year's signing at the White House of the Egyptian-Israeli peace treaty.

Carter, as the principal author and director of the Camp David script, is under intense pressure to come up with an equally successful second act -- completion of an Egyptian-Israeli agreement on a five-year interim system of limited self-improvement for the Palestinian inhabitants of the Israeli-occupied West Bank and Gaza Strip territories.

In the U.S. policy view, such an accord is especially urgent now in a region where the three decade-old tensions of the Arab-Israeli conflict have been complicated and heightened by the twin crises in Iran and Afghanistan.

Theoretically, conclusion of an autonomy agreement for the occupied territories would help to defuse the volatile Palestinian issue and draw moderate Islamic countries, which have remained suspiciously aloof from the peace process, closer to coming to terms with Israel and to cooperation in U.S. efforts to halt the spread of Soviet influence in the Middle East and Southwest Asia.

So far, however, the script hasn't been playing out in a way that squares with these expectations. Despite the cheery reassurances of U.S. mediators, the autonomy talks rapidly are approaching the MAY 26 target date for their completion with Egypt and Israel still so far apart that almost no one believes they can be finished on time.

El-Baz asserted last week that "a vast gap" remains between Egypt's demand that the inhabitants of the occupied territories be given self-governing rights, which would make them almost completely autonomous from Israel, and Israel's determination to limit the powers of any self-governing authority severely so that it could not serve as the eventual nucleus of an independent Palestinian state.

If the Israeli view prevails, El-Baz said the results will be so unacceptable in the Arab world that any self-governing authority created by the negotiations would be stillborn. Such an authority would be regarded as an Israeli puppet he warned and the Palestinians would refuse to vote for its members, serve in its administration or cooperate with its actions.

El-Baz said Sadat is coming here in the expectation that Carter will use the Washington talks to find ways of "bridging the gap" between the Israeli and Egyptian positions and enable both governments to give their negotiatiors new instructions that will allow a burst of progress in the time remaining until May 26.

Even then, he said, the Egyptians believe the talks will come down to the target date with "two or three of the toughest issues still unresolved." He added that Egypt thinks it is "inevitable" that another three-way summit between Carter, Sadat and Begin will be required to wind up the matter successfully.

If genuine progress is apparent by May 26, El-Baz said, Egypt would be willing to keep negotiating beyond that date. But he also warned: "The talks are not an end in themselves," and "in the absence of such progress" the Egyptians would be unwilling to keep them going on "an open-ended basis."

Although El-Baz stopped short of saying that failure to break the impasse would mean the end of the Egytian-Israeli rapprochement, he warned that failure would have results "very detrimental to all parties concerned."

The consequences, he said, would be a new upsurge of extremism in the Middle East, reinforcing charges from Egypt's estranged Arab allies that Sadat has sacrificed the interests of the Palestinians, and an embrace by the region's more moderate Arab regimes of alternative approaches being advocated by some West European countries -- notably France and Britian -- centeriing on efforts to bring the Palestine Liberation Organization into the negotiating process.

Since the PLO is anatheme to Isreal, such moves would put the United States on a collision course with its European partners. This would increase the strains already injected into the Western alliance by the dispute over the best way of dealing with the Soviet invasion of Afghanistan. d

U.S. officials, while insisting that it is premature for pessimism, privately agree with El-Baz's assessment of the consequences that would flow from collapse of the autonomy talks.

As El-Baz noted, the domnant issue -- one that touches every other aspect of the talks -- is Israel's concern about its security. The Israelis fear that too much freedom for the West Bank could eventually transform it into a PLO-dominated entity that would serve as a base for subversion, or even new open warfare aimed at Israel's territorial heart.

This translates into bitter arguments about the size and nature of a continued Israeli military presence on the West Bank, the scope of the police powers to be granted the self-governing authority, and the degree to which its authority in other areas should be limited or subjected to a veto by Israel.

The Egyptians are "pushing for a special committee within the negotiating process to sift the security aspects out of the other issues and deal with them separately. Although Israel originally balked at that idea, it has given signs of relenting. Formation of a so-called "security committee" is one of the things expected to result from the Washington talks.

Closely approximating the security question in its complexity and emotional content is the issue of who will have u ltimate control over land ownership and use in the occupied territories. That problem has been exacerbated greatly by the Begin government's insistence, over U.S. objections, on establishing Jewish settlements on the West Bank.

These settlements have been the biggest factor in making the automomy talks suspect throughout the Arab world. The settlements are regarded by Arab governments as the device through which Israel allegedly is trying to effect a "creeping annexation" of the West Bank.

Tensions over the settlements caused the incident last month that saw the United States first vote for and then disavow a United Nations resolution criticizing Israeli policy. Since then, Carter's special Mideast negotiator, Sol M. Linowitz, has tried unsuccessfully to get Begin to agree to a moratorium on new settlements until May 26.

Carter can expect Sadat this week to underscore anew Arab concern about the settlements, and his expectation that the United States will use its leverage to rein in the Israelis on moving ahead with the settlements.

Other major problems Carter will have to face include control over allocating the West Bank's scarce water resources -- a matter that eventually could involve the neighboring Arab countries of Jordan, Lebanon and Syria -- and the status of Palestinian inhabitants of East Jerusalem, which borders on the West Bank.

Egypt insists that Palestinians living in East Jerusalem should have the right to vote in elections for the self-governing authority and be treated in certain other respects as West Bank residents. But the Israelis fear this would establish a legal precedent, buttressing the Arab contention that East Jerusalem is part of the West Bank rathan than part of an undivided city that Israel insists must remain under its control.

All of these issues are likely to cause Carter considerable difficulty as he tries to pick his way through their built-in booby traps and find compromises acceptable to the various parties. Yet, as one senior U.S. official closely involved in the talks said last week:

"We think there is a will on both sides to get it done, and if that will persists, it can be done, if not by May 26 then shortly afterward. In the end, we think we can get an agreement that won't give the Palestinians everything they want, but that will be attrative enough to convince them it's 'the only game in town' and make them willing to finally come in and participate."