The Israeli Cabinet today decided to oppose a bill presented in parliament to annex the Golan Heights captured from Syria, thereby dooming the controversial proposal.

Responding to intense international pressure on the issue, at a time of heightened tension with Syria following recent clashes in south Lebanon, the Cabinet decided to call upon the Knesset, or parliament, to strike the Golan Heights bill from the agenda. A preliminary debate had been scheduled for Wednesday.

The opposition Labor Party also voted to oppose the measure. But the sponsors, calling the Cabinet decision an "act of stupidity and cowardice, said they would press the issue by presenting a motion of no-confidence in the government.

It was the second major retrenchment by Prime Minister Menachem Begin's rightist Likud government in recent months when confronted with strong pressure from abroad on an issue involving territory captured by Israel during the 1967 Six-Day War.

In September, Begin seemed to be on the verge of moving his office and staff to new quarters in East Jerusalem -- annexed by Israel in 1967 almost immediately after its capture -- but the plan was shelved indefinitely following stiff objections by the United States and the United Nations.

Cabinet secretary Aryeh Naor told reporters after today's government meeting that formal annexation of the Golan Heights would change nothing in terms of Israel's security on its eastern front and would only encourage foreign condemnation. In any case, Naor stressed, the occupied heights will remain under the control of the Israeli army.

For months, Begin and his ministers had remained silent on their intentions on the Golan Heights bill, which was drafted by Knesset members Geula Cohen and Moshe Shamir of the tiny, ultranationalist Tehyia, or Renaissance, Party.

Opponents of the measure feared a repeat of the adoption of the controversial law perpetuating Jerusalem as Israel's capital. That law was regarded by a majority of Knesset members as an unnecessary provocation, but it breezed through parliament on July 30 because nobody -- including Cabinet ministers -- was willing to take a stand against it. That bill was also sponsored by Cohen.

The U.N. Security Council condemned Israel for adopting the Jerusalem law and the 13 remaining foreign embassies in Jerusalem were moved to Tel Aviv in protest. Most countries, including the United States, maintain their embassies in Tel Aviv as part of a policy that considers the final status of Jerusalem yet to be determined.

Annexation of the Golan Heights, kin addition to further isolating Israel in the world, would have made Syrian participation in any form of Middle East peace talks almost unthinkable. Moreover, it would throw doubt on Israel's adherence to U.N. Resolution 242 -- the basis of the Camp David peace process -- because the resolution calls on Isral to withdraw from occupied territories.

The demise of the Golan Heights bill followed a pattern of political maneuvers that completely reversed the approach taken during the Jerusalem bill debate.

Like the Jerusalem bill, it was conceived as a bill that a Knesset majority might silently oppose on practical grounds, but would not dare vote against in the face of an overwhelming national consensus for keeping the strategic heights.

A campaign to annex the Golan Heights has been building ever since Israel its Sinai Peninsula settlements for a peace treaty with Egypt. Public opinion polls show that 76 percent of all Israelis support Israeli sovereignty over the Syrian territory.

But as opposition abroad mounted against the annexation bill, the government and the moderate wings of the Knesset appeared mindful of the backlash from the Jerusalem bill. Condemnations of the proposed annexation had already come from the United Nations and as recently as last week U.S. special ambassador Sol Linowitz warned Begin that the United States would "deeply regret" adoption of the measure.

In an unmistakable signal to the Cabinet, Labor Party leader Shimon Peres yesterday told his party that Begin's Likud coalition might be discouraged from supporting the bill if Labor came out solidly against it. Begin appeared to take the hint that responsibility for dooming the bill could be shared by both sides.