President Reagan, unmistakably warning Israel that "it is not the business of other nations to make American foreign policy," formally notified Congress yesterday of his administration's intention to sell an $8.5 billion package of sophisticated radar planes and other aircraft equipment to Saudi Arabia.

The president's stern message to Israel came at a nationally televised news conference shortly after Secretary of State Alexander M. Haig Jr. sought to block a looming congressional veto of the sale by telling senators of a U.S.-Saudi "understanding" providing for an American presence on the Airborne Warning and Control System (AWACS) planes "well into the 1990s."

However, most members of the Senate Foreign Relations Committee, who were briefed by Haig at a closed meeting, appeared to come away with the impression that the agreement is non-binding and merely derives from an assumption that the Saudis will require U.S. technical help and training to operate the equipment for several years.

Except for the committee chairman, Sen. Charles H. Percy (R-Ill.), those senators who heard Haig seemed to agree that the arrangement falls far short of the obligatory joint U.S. control over the AWACS that appears necessary to prevent a majority of the Senate from voting against the sale.

Haig clearly failed to win over Sen. John Glenn (D-Ohio), the Senate's foremost advocate of joint control and a man whose support is considered pivotal to administration hopes of reversing the majority in the Senate currently leaning against the sale.

"At this point, it is very difficult to see that my basic points have been met adequately," Glenn said after the briefing. Later, in a dramatic exchange with Haig during the secretary's public testimony, Glenn made clear that he cannot vote for the package in its present form and told Haig he believes the sale is "doomed to defeat."

Hours after the proposal was submitted, Sen. Robert Packwood (R-Ore.) submitted a resolution of disapproval on behalf of 50 senators, one less than the majority needed for a vote to block the sale in the Senate.

An aide to Packwood said all of the 50 senators, who first signed the resolution last month, were consulted again to see if Haig's briefing had changed their minds. "Not one did, not a one," the aide said.

Those were the highlights of a day that saw the administration set the stage for a showdown on the Saudi deal--the largest arms sale in history--by sending the formal notification to Congress. The deal can now be blocked if both houses vote against it within 30 days; and the administration, conceding that it has no chance of prevailing in the Democratic House, has pinned its hopes on an all-out campaign to reverse the opposition in the Republican Senate.

To launch that effort, Reagan sent Haig and Defense Secretary Caspar W. Weinberger to the Foreign Relations Committee; and the president himself addressed the issue by volunteering a statement at the outset of his news conference. In words obviously aimed at Israel and its American supporters, he made clear that he believes Israeli Prime Minister Menachem Begin has gone too far in charging that the sale is a danger to the security of the Jewish state.

Asserting that "it poses no threat to Israel now or in the future," Reagan said: "As president, it's my duty to define and defend our broad national security objectives . . . . And, while we must always take into account the vital interests of our allies, American security interests must remain our internal responsibility. It is not the business of other nations to make American foreign policy."

At another point, while lauding the recent visit here by Begin as "a fine meeting," Reagan added, " . . . what really is the most serious thing is the perception that other countries must not get a perception that we are being unduly influenced one way or the other with regard to foreign policy."

Reagan also lobbied several senators individually at the White House. Sen. Harry F. Byrd Jr. (Ind-Va.) said Reagan's "very strong presentation" included new elements.

"They have refined the original agreement. They have added to it some safeguards, and what has been done is an improvement and is encouraging," said Byrd, who is not among the 50 senators on Packwood's list.

One big reason underlying congressional demands for greater American control over the AWACS is the memory of the large amounts of advanced U.S. weaponry that was lavished on Shah Mohammad Reza Pahlavi of Iran and then lost when the shah was overthrown by anti-American revolutionary forces. When Reagan was asked whether the alleged instability of the Saudi royal family's rule might lead to a similar result, the president replied:

"I have to say that Saudi Arabia, we will not permit to be an Iran . . . . There is no way, as long as Saudi Arabia and the OPEC nations there in the East, and Saudi Arabia's the most important, provide the bulk of the energy that is needed to turn the wheels of industry in the Western world--there's no way that we could stand by and see that taken over by anyone that would shut off that oil."

Reagan said he believes the chances of passing the Saudi aircraft sale, which the administration considers vital to protecting the Persian Gulf oil fields are "good"; and he added that the package presented to the Senate by Haig should relieve most of the Senate's concerns about joint crewing of the AWACS and other aspects of American control.

Haig, referring to the air attack Wednesday night by Iran on Saudi Arabia's oil-producing neighbor, Kuwait, called the incident "a dramatic and, I think, God-given warning" about the need to help Saudi air defenses.

Weinberger confirmed that Iranian planes carried out the attack, saying "the AWACS based inside Saudi Arabia . . . picked these jets up at the time they left the Bushire airport in Iran on the Persian Gulf , tracked them all the way across the Arabian Gulf and into Kuwait. . . ."

The administration delayed submitting the notification to Congress until yesterday morning while Richard W. Murphy, the new U.S. ambassador in Saudi Arabia, engaged in frantic, last-minute efforts to win Saudi approval for a compromise. But a big question remained about whether the results of the negotiations will impress a majority of senators as constituting sufficient safeguards against the planes being used against Israel or falling into the hands of U.S. foes.

Following Haig's secret briefing on the new understanding, Percy, who is expected to support the sale, talked enthusiastically about the delay producing "new assurances" including what he hinted was a satisfactory agreement on the joint-command question. But when Haig described the proposed safeguards in his opening statement to the committee's public session, they sounded little different from the measures he outlined in testimony two weeks ago.

His main point was to emphasize that the five AWACS planes won't be delivered until 1985 and 1986. He then added: "Given the shortage of Saudi aircrews and technicians, this means that there will be an American presence in the aircraft and on the ground well into the 1990s."

However, the questioning from committee members, many of whom have signed a resolution opposing the sale, indicated that they heard nothing in the closed meeting to change their view that the proposed safeguards are inadequate.

What seems to be the still-dominant mood of the Senate was underscored by Haig's exchange with Glenn, who has said he believes it is in the U.S. interest to provide the Saudis with an even more advanced version of the AWACS than presently contemplated, but only if the United States retains joint control.

When Glenn asked if the Saudis would be obliged to keep Americans in the crews at all times, Haig replied, "I don't think that question can be asked with the kind of assurance you're looking for."

Noting Glenn's support for the principle of maintaining AWACS planes in the Persian Gulf, Haig told him: "I would hate to have an advocate for the solution become an albatross that drags it down to defeat."

When Glenn responded that he wasn't willing to run the risk of insufficient control and warned that the deal, in its present form, is headed for defeat, Haig asked, "Would you kill it for that?"

"Yes," Glenn shot back, and Haig, shaking his head, said: "I think that's very tragic."

Their exchange seemed to reinforce what many congressional sources have been saying; the sale is in trouble not because of pressures from the so-called Israeli lobby, as Reagan intimated at his news conference, but because many senators, including several Republicans, are uneasy about the control issue.