President Carter's decision not to attend the funeral of Yugoslav President Tito has provoked some sharp criticism in Western Europe that underscores deep allied differences over the current course in East-West relations.

Publicly, Carter's absence from the rites -- attended by one of the largest group of world leaders ever assembled -- including the ailing Soviet President Leonid Brezhnev, was assailed as a failure to demonstrate support for Yugoslavia's independence.

The West Europeans are also annoyed with what they see as the president's inability to understand the importance of Tito's passing and the symbolic commitment to detente that the Belgrade gathering of world leaders represented.

Carter's absence marred this symbolism and underscored the chilly international climate that was generated by the Soviet invasion of Afghanistan.

Western European countries, all of which sent their heads of state or heads of government or both, saw in the president's absence a visible demonstration of allied differences over East-West relations.

The allies have reluctantly followed Carter's drive to boycott the Moscow Summer Olympics. They have given only halfhearted support to his sanctions against the Soviet Union. And they have privately warned that the entire system of European security and cooperation established by the 35-nation conference in Helsinki in 1975 could break down as a result of the hard American position.

A follow-up conference on the Helsinki accords is scheduled to be held in Madrid next September and November. With the current East-West freeze, several major allies including France and West Germany have privately called for the postponement of the Madrid meeting, fearing a total impasse.

Since Carter was not expected to change his policy during a presidential election campaign, West Europeans have been worried that the Soviets and their allies may decide to walk out of the Madrid meeting and thus destroy the entire Helsinki structure.

Against this background, the Tito funeral provided a chance for summit diplomacy to at least halt the current downward slide in East-West relations. dCarter's decision not to attend thus produced sharp condemnation in the European press.

The Times of London, which often reflects official British views, said the president's decision "is unwise for reasons which are so clear that the failure of the White House to see them must deepen the conviction that the United States is led by a man who is not just muddled but in some ways blind to whole areas of reality."

The Times continued: "In this case he shows himself blind to the stature of President Tito, to the importance of Yugoslavia, to the interests of the United States and, once again, to the sound views of his own State Department."

While most U.S. officials dealing with communist affairs urged that Carter go to Belgrade, administration sources defending his decision said the president was not prepared to meet Brezhnev and that even a social encounter between the two would have sent "wrong signals" about Carter's determination to continue the present course.

Carter, who frequently has been accused of vacillation in the past, is now believed determined to stick to his current position in dealing with Moscow. On several occasions in recent months he had reaffirmed American backing for Yugoslavia's independence and integrity, saying his administration would do "what it must to provide this support."

In this context, administration sources dismiss suggestions that Carter's decision signaled any lack of U.S. concern about Yugoslavia and raised the possiblity of a presidential visit of Belgrade in June.

In Belgrade, Austrian Chancellor Bruno Kreisky, one of the senior European leaders, said in reply to a Western reporter's question that Carter's absence was "disturbing" because the Americans had missed a great occasions.