With the still-flickering hopes of Camp David that attend President Carter's reelection bid, and in the face of seductive campaign promises by challenger Ronald Reagan, Israel is gripped in unprecedented ambivalence about the upcoming U.S. election.

Perhaps nowhere else outside the United States do American presidential contests have such an immediate and profound impact as in Israel, the quintessential client state.

In real terms, the survival of the 32-year-old Jewish state hinges on momentous decisions made in Washington.If ever a U.S. ally were challenged to identify and define the fundamental differences between the foreign policies of the two leading presidential candidates, Israel has been this election year.

In fact, Israelis are still groping through the murky haze of campaign rhetoric, records and charges and countercharges to pinpoint contrasts between the candidates on volatile Middle East issues.

In the Israeli view, both Carter and Reagan can make an ample case here that they are strongly pro-Israel. But then so could every presidential candidate since the founding of the state, with the possible expections of Dwight D. Eisenhower and Barry Goldwater.

But what is uncertain in the minds of many Israelis -- officials and ordinary citizens alike -- is whether either candidate will really make a difference in shaping the events that will determine the destiny of the United States and the free world. With increasing conviction, Israelis believe that what is good for the United States and the Western world is good for Israel.

On the official level, government leaders are reticent this election year. They remember the brouhaha that followed Israel's then-ambassador Yitzhak Rabin endorsing Richard Nixon in 1972, as well as then-defense minister Ezer Weizman's lavish praise of Carter on the eve of this year's primary season. Weizman, now out of the government, has been soundly criticized here for recent appearances with Carter before the presidential candidates debated in Cleveland.

It is known that the 20-member Cabinet is divided on the candidates, and it is widely presumed that Prime Minister Menachem Begin favors his Camp David partner, Jimmy Carter. Privately, government officials express deep frustration at being able to define the key qualities of either candidate that are critical to Israel.

"There's no doubt that Carter is pro-Israel, but he sees the world wrong. He sees it in terms of North-South, and is preoccupied with appeasing the Soviet Union because of its military strength and appeasing the rejectionist Arabs because of their oil strength. Reagan hasn't proven his support of Israel, but he is not intimidated by the Russians. He seems to see the world like we do, in East-West terms," an aide to the prime minister said.

"So, what is better, a known friend who is weak as a world leader, or an untested candidate who would probably be stronger against Soviet expansionism?" he asked.

Boaz Abramsohn is a 30-year-old bank employe, and he admits to not knowing very much about American politics. But he says he knows enough to be worried this election year.

Abramsohn says he followed the events in Iran and Afghanistan, and was dismayed that "America was left on the sidelines.

"Of course the election choice will affect us in Israel. The president that represents America will affect the whole free world. But Carter has not made the impression of a leader of a major world power. And Reagan? I see the face of a 69-year-old ex-movie star who seems too old to start in politics. The saddest thing is that these are the two candidates that the United States has to choose from. There is too much at stake, in Israel and the world, to choose between these two people," he added.

Traditionally, Israel has had close ties to the Democratic Party, partly because of the Israeli liberal-socialist tradition and partly because American Jews have always been a mainstay in the party.

Carter would thus seem to be the more likely Israeli preference on that basis alone. More important, perhaps, is the element of continuity in the Middle East peace process.

Israeli officials who lean toward Carter inevitably raise the question of Camp David, noting that if the president is reelected a U.S.-Israeli-Egyptian summit conference is certain to be held, followed by intensified negotiations on the proposed autonomy plan for the West Bank and Gaza Strip.

However, if Reagan is elected, the officials expect that efforts to consolidate the Camp David accords would diminish during a Carter lame-duck administration, and the new president probably would not get around to a major plunge into Middle East diplomacy until the middle of next year.

Since the Israeli election campaign will begin then, it is likely that a Reagan victory would bury Camp David for more than a year.

Conflicting with these reasons to prefer Carter is a widespread Israeli perception of him as having repeatedly abandoned Israel in his first term of office, either from expediency or because of inept foreign policy. The charges include providing arms to Arab states hostile to Israel, permitting the U.N. Security Council to condemn Israeli West Bank settlements and the annexation of East Jerusalem, and violating an agreement not to talk with the Palestine Liberation Organization until it recognizes Israel's right to exist.

Moreover, there is the persistent fear that if reelected to a mandatory last term, Carter would feel free of American Jews influence, and would exert extraordinary pressure on Israel to make concessions in the autonomy negotiations.

In contrast, Reagan is perceived as opposed to equipping rejectionist Arab states with offensive weapons, staunchly anti-Soviet, supportive of Israel on the issues of West Bank settlements and East Jerusalem, and in favor of making Israel a joint military partner in the Middle East.

"I'll tell you what I think," says 39-year-old restaurant owner Yossi Ofek, tidying tables among downtown Jerusalem lunchers. "Neither is capable of changing what's happening in the world today.

"They will make the same mistakes. Since neither is dealing with a philosophical change, there is no choice and no hope, either in Israel or the United States.

"Carter has lost all his strength and has allowed the Russians to walk all over him. He uses Israel when he needs to, and then he puts the pressure on us, even though Israel is one of his true allies. I don't see Reagan doing anything different," says Ofek.

"Flora Zadok, 27, a lawyer, echoes this brand of criticism, saying, "Both are not good for Israel. Reagan because he promises like everybody else, but won't deliver. Carter because of the surprise he has pulled on us, like the Jerusalem vote in the United Nations. In the peace talks, I saw Carter's policy moving pro-Arab all the time."

American Jewish leaders who visit Israel these days say they are disconcerted by the ambivalence over the U.S. election, because they cannot get a clear idea from Israel on which candidate would be better for Israel.

Only one newspaper, the independent Maariv, declared for a candidate. In an editorial yesterday it said Carter's "rich past of anit-Israel statements" makes Reagan the preferred choice for Jewish voters in the United States.

In the last presidential election, the Hilton Hotel here staged a gala election-night watch in its ballroom, beaming in televised returns to a spirited and overflowing crowd.

The election night party will be repeated this year in the Tel Aviv Hilton, but observers are predicting less than an overflow crowd.