Israeli Defense Minister Ariel Sharon plans to ask the Cabinet to abolish the military government in the occupied West Bank and Gaza Strip and replace it with an Israeli civilian authority answerable to himself, sources in the Defense Ministry confirmed today.

It would be the first time since Israel conquered the West Bank and Gaza in the 1967 that the Army has not controlled all civilian affairs in the occupied territories.

Sharon's plan, according to the Defense Ministry sources, is intended to build a civilian government infrastructure in the West Bank and Gaza so that it will be in place well before any Israeli-Egyptian agreement on proposed autonomy for Palestinians, and that local inhabitants in the occupied areas quickly could take over administration of their civil affairs.

It is hoped, defense officials said, that West Bank and Gaza Palestinians will accept some administrative posts before an autonomy agreement. The automony negotiations, dormant for 15 months, began again today in Cairo.

There was intense interest in Cairo over the latest Israeli plan, Washington Post correspondent David Ottaway reported, but an Egyptian spokesman was noncommittal, saying the government wished to hear more details from Sharon before taking a position.

The Sharon scheme is remarkably similar to a proposal suggested earlier this year by former foreign minister Moshe Dayan, in which autonomy would be unilaterally imposed on the Palestinians, with Israel retaining responsibility for security.

For several weeks, Sharon has been conducting talks with West Bank and Gaza Strip Palestinian leaders, while at the same time relaxing some controls in the territories in an apparent attempt to encourage local participation in a new civilian administration.

The initial reaction of most West Bank leaders, however, has been to reject the plan as a ruse to unilaterally implement autonomy, which local West Bank inhabitants and the Palestine Liberation Organization oppose.

Under the Sharon proposal, the Army would retain responsibility for security among the 1.3 million Palestinian inhabitants, but command of the security forces would pass from the military governor to regular Israeli Army regional commanders.

The plan calls for an Israeli civilian administrator of the West Bank and Gaza Strip to coordinate civil affairs with various Israeli government ministries, as has been done in the past, but the military would be gradually phased out of all nonsecurity matters.

Sharon is understood to have asked Menachem Milson, a Hebrew University professor and former Arab affairs adviser to the West Bank military government, to take the job as civilian administrator of the occupied territories. Milson recently published an article in the magazine Commentary in which he argued that gradual transfer of civil authority to Palestinians would encourage cooperation by moderate Palestinians and enhance the prospects for implementation of autonomy. Sharon is said to have been impressed by the article enough to offer the top administrative post to Milson.

Nablus Mayor Bassam Shaka said the Sharon plan was a "desperate attempt" to enlist Palestinians to serve Israel's interests. The scheme will fail, Shaka said, because it ignores the leadership of the Palestinian people, which he said is the PLO.

Mayor Ibrahim Tawil of Biera said, "We totally reject any type of autonomy. The attempts to divide the military government" are efforts to "legitimize" the occupation, he added.

The acting mayor of Hebron, Mustafa Natche, said, "Whatever the names are and however they are changed, the occupation remains an occupation." The plan, he added, is designed to implement autonomy without the approval of the Palestinians.

Correspondent Ottaway added from Cairo:

Resumption of the long-stalled Palestinian autonomy talks came today amid much official optimism but few concrete indications that any major breakthrough was in the offing.

All three delegation leaders, Egyptian Foreign Minister Kamal Hassan Ali, Israeli Interior Minister Yosef Burg and U.S. Ambassador to Egypt Alfred L. Atherton Jr. made perfunctory speeches expressing confidence in the success of the new round of the talks.

Atherton reaffirmed the commitment of the Reagan administration to helping Egypt and Israel resolve the issue of Palestinian autonomy. "We are here to play our full role and do all we can to help the process go forward," he said.

Atherton is serving as cochairman of the U.S. delegation with the American ambassador to Israel, Samuel Lewis, although the negotiations are taking place at a higher ministerial level.

The failure of the Reagan administration to name a replacement for the last special U.S. presidential envoy to the peace talks, Sol Linowitz, has not gone unnoticed, particularly by the Egyptians.

There was no immediate explanation from either the U.S. delegation or the American Embassy here as to why Washington so far has not appointed a special envoy. But failure to do so has raised speculation here about the depth of commitment of the Reagan administration to the Camp David approach.

Spokesmen for both Egypt and Israel emphasized the need prior to the resumption of the autonomy talks for an initial agreement on the broad principles of autonomy and this is likely to be the main objective of the two-day meeting here.