he Israeli Cabinet today unanimously approved Defense Minister Ariel Sharon's plan to reorganize the government of the West Bank and Gaza Strip, putting some services in the occupied territories under civilian administration for the first time since the Israeli takeover in the 1967 war.

The Cabinet stressed, however, that ultimate authority in the occupied areas will remain with the military, even if some Palestinians are brought into senior positions in the Israeli civilian administration.

"Certain functions will be carried out by civilians. Of course, all of them will be acting under the military government. The military government cannot be replaced by Israeli civilians," Cabinet Secretary Aryeh Naor said after today's meeting.

The Cabinet's qualifications to Sharon's much-publicized plan for the West Bank and Gaza Strip, part of a general "relaxation" policy advocated by the new defense minister, appear to bear out concerns expressed by West Bank Palestinian leaders that the military would retain effective control of the occupied territories, despite a new civilian cast given to the occupation government.

Sharon earlier had made it clear that the civilian administration, which will dovetail its service functions with Israeli ministries, would be answerable to him in any case.

Naor said that as a "confidence-building measure," the Israeli government decided that "some of the public service functions carried out today by military officers will tomorrow be carried out by civilians. Not that the military government will be replaced by a civilian government, but that civilians in the future. . . will replace the Army officers dealing with those daily affairs now." He said he hoped the civilian officials "will include also inhabitants of those territories."

He said the changeover will begin Dec. 1.

Under the Sharon plan, responsibility for security in the occupied areas will remain with the Army, but will be decentralized, with command passing from the military governor to regular regional Army commanders.

West Bank Palestinian leaders reacted with skepticism to Sharon's plan, calling it "cosmetic" change that will have no noticeable effect on the day-to-day occupation policies.

Mustafa Natche, acting mayor of Hebron, called it a "Camp David trick" designed to lure a handful of Palestinian "collaborators" to the negotiations for autonomy in the West Bank and Gaza.

"If the people in the military dress in civilian clothes, it is still an occupation government," Natche said.

Tulkarm Mayor Hilmi Hannoun said Sharon is attempting to "foster new leadership" in the West Bank, but that most residents regard the Palestine Liberation Organization as the only legitimate representative of the people.

Nationalist leaders in the territories said Sharon's reforms have been accompanied by new restrictions on leaders who have refused cooperation with the occupation government, including a cutoff of municipal aid funds administered jointly by the PLO and Jordan, restrictions on travel, prohibitions against openly speaking on behalf of the PLO, prohibitions against maintaining foreign bank accounts and sporadic harassment by Israeli intelligence agents and security forces.

Meanwhile, the Cabinet also adopted a resolution condemning a statement by Saudi Arabia yesterday that appeared to reject joint Saudi-U.S. operation of radar surveillance aircraft known as AWACS, for Airborne Warning and Control Systems.

The Cabinet communique said, "The unequivocal statement of the Saudi government . . . provides further proof, if such were needed, that the supply of these surveillance aircraft, together with the offensive weaponry of the F15s, constitutes a serious danger to Israel's security." F15s are sophisticated fighter planes the United States provides to Israel and has agreed to sell to Saudi Arabia.

Cabinet sources said that the statement, offered by Deputy Prime Minister Simcha Ehrlich, was opposed by Energy Minister Yitzhak Berman and Health Minister Eliezer Shostak, who argued it would unnecessarily irritate the United States. Prime Minister Menachem Begin argued strongly for its adoption, however, the sources said.

Meanwhile, Begin's press secretary, Uri Porat, denied reports that the prime minister plans to move his offices soon to new facilities in East Jerusalem as a symbolic reaffirmation of Israel's sovereignty over that part of the city that was captured by Israel in the 1967 war and later annexed. Cabinet officials said, however, that Begin does plan to start holding some ministerial meetings in the East Jerusalem offices.