The saddest thing about the death of Egypt's Anwar Sadat is that it was such a waste.

It is impossible to know what mix of motives, religious, political or personal, inspired his assassins. But it may not be overstating the case to say that what cost Sadat his life--and the thing that will make the world miss him most --was his historic gamble for peace.

Sadat understood as well as anyone that the barrier to peace in the Middle East was always psychological: a melange of bitterness that the world seemed to care too little when the Nazi Holocaust claimed the lives of six million Jews and guilt that too many Jews went too unresistingly to their deaths. The Israeli psychology is capsulized in the phrase: "Never again."

Sadat understood as well that the Palestinians, who had no part in the Holocaust and who cared nothing about the the psychological scars it left on the Jews, were equally bitter and guilt- ridden that they had been displaced, also too unresistingly, by the establishment of the Jewish state. Their answer to the Jews' "Never again" was their determination to liberate their homeland from the Jewish intruders.

This psychological standoff, Sadat knew, was incapable of military resolution. What was needed was a psychological breakthrough. Sadat provided the opportunity for just such a breakthrough with his unprecedented 1977 visit to Israel.

It was a masterful gesture that said, in effect: let us put our psychology behind us and agree to make peace.

It seemed for a while that the gamble might work. But the Camp David peace talks engineered by then president Carter fell short of Sadat's dream. It was the Egyptian's notion that if he and Israeli Prime Minister Menachem Begin could agree to make peace, it could mark the beginning of a generalized peace between Israel and its Arab neighbors. What was required was not a lawyerly working out of details--technicians could handle that--but an agreement in principle between the two chiefs of state.

Ironically, until shortly before Sadat's statesmanlike gesture, it was the Israelis who were insisting that the barriers to peace were psychological: that the problem was the refusal of the Arabs, specifically the Palestine Liberation Organization, to accept the legitimacy of Israel's existence. Sadat's move could have swept away this deadly psychology, if only there had been a complementary grand gesture from Begin. It never came.

Instead of accepting Sadat's statesmanship as an effort to cut the Gordian knot of bitter history, the Israeli leader treated it as the opening gambit in a round of ordinary negotiations: negotiations that, for all the hoopla that surrounded each petty point of agreement, in fact got nowhere.

As a result, Sadat, instead of becoming a leader of his Arab brothers became isolated from them as a man who had dared make peace with the mortal enemy. He was viewed by them as a traitor and a fool, an he was, almost from that moment, a dead man.

Israel, if it had seized the opportunity, could have saved him--or at least could have saved and institutionalized the peace process. As it was, the peace effort, from the Arab side, was embodied in the person of Sadat. And with his death, both sides are far worse off than before.

It is easy enough to understand why Israel was unwilling to enter into a gamble of the magnitude of Sadat's. The far-more-numerous Arabs could lose militarily again and again and still survive. For Israel, a series of military victories could only buy time; a single defeat would be fatal.

The other side of that somber fact, though, is that Israel could never save itself through military might but only through peace with its neighbors. Sadat tried, and failed, to make that peace.

Sadat laid everything on the line: his personal and political prestige, his credibility and his life. If Israel had joined in the gamble--if even a few of the Arab chiefs of state could have seen that it was in their overwhelming self-interest to become party to the search for peace-- Sadat's gamble could have changed the course of Middle East history for all time.

They didn't. Sadat has died a wasted death, and business in that strife-torn part of the world will go tragically on--as usual.