The 10 European Common Market nations today sharply condemned and refused to recognize Israeli action to effectively annex the Golan Heights territory it took from Syria in l967.

In language being repeated tonight by the 10 governments in European capitals, Common Market foreign ministers meeting here said in a statement that they "strongly deplore" the Israeli move as "contrary to international law and therefore invalid in our eyes."

"This step prejudices the possibility of the implementation of United Nations Security Council Resolution 242 and is bound to complicate further the search for a comprehensive peace settlement in the Middle East to which we remain committed," the European foreign ministers said.

This reaction raised questions about participation by Common Market members Britain, France, the Netherlands and Italy in the international force being formed by the United States to keep the peace in the Sinai after Israel completes its withdrawal next April under its Camp David peace treaty with Egypt.

The four nations have not yet responded to a compromise U.S.-Israeli statement earlier this month on European participation in the force despite European reservations about the future of the Camp David process and stated belief in the necessity of Palestinian involvement in future negotiations. Contrary to the European view, the U.S.-Israeli statement emphasized their commitment to Camp David as "the only viable and ongoing negotiating process."

Israel demanded acceptance of this statement by the four European countries who agreed to contribute small military support contingents to the Sinai force. A European response unacceptable to Jerusalem could bring an Israeli veto of their participation.

Even before yesterday's action by the Israeli government on the Golan Heights, the Europeans had been delaying their response. They were hoping it could be minimal, according to informed diplomatic sources, because they did not intend to retreat from their collective position on the Middle East to satisfy the Israelis.

Asked about this after today's Common Market foreign ministers' meeting, British Foreign Secretary Lord Carrington, who currently holds the European Community presidency, said he had "nothing to add" to previous Common Market statements on the Middle East and the Sinai force.

"We will reply to Israel on the U.S.-Israeli statement when we are ready," Lord Carrington added, "and we are not yet ready."

Dutch diplomats reportedly said the Netherlands would have to consider its reply to Israel "in the light of" yesterday's Israeli action. But other diplomatic sources said the four countries involved had not collectively decided to link their next move on the Sinai force to the Golan Heights question.

British Prime Minister Margaret Thatcher said tonight at a dinner for the Board of Deputies of British Jews that she believed "with the sorrow of a friend that the latest move is harmful to the search for peace.

"Real security," Thatcher said, "can come only from a lasting peace recognized to be just and defended because it is just -- just to Israel, just to her neighbors and just to the Palestinians."