Yellowish clouds of thick dust billow over a desert plateau overlooking the Red Sea's narrow Strait of Tiran and the Saudi Arabian coastline as giant earth-moving machines of a U.S. construction consortium race against the clock to complete a base for the multinational peace-keeping force that will patrol the broad expanses of the Sinai Peninsula.

Along the road that runs 140 miles from the southeastern tip of the Sinai to the port and resort city of Eilat, at the northern tip of the Gulf of Aqaba, Israeli Army flatbed trucks lumber through the mountain passes, straining under the load of dismantled buildings being transported to the Negev Desert.

In sun-drenched stucco houses in the settlement town of Ophira, moving cartons are stacked, giving the lie to spray-painted graffiti outside defiantly rejecting surrender.

Just 12 years after the late Israeli war hero and statesman, Moshe Dayan, proclaimed "better Sharm el-Sheikh without peace than peace without Sharm el-Sheikh," Israel is leaving the most idyllic part of the wedge-shaped 23,622-square-mile peninsula that it has occupied since the Six-Day War of June 1967.

While in Yamit and other settlements along the northern Sinai's Mediterranean coastline nationalist holdouts are commanding attention by saying they will refuse to leave, life here is quietly running down. Israel's $17 billion investment in a new frontier--a gamble predicated on the belief that then-hostile Egypt could never bring itself to make peace with the Jewish state--is being abandoned in the last and most painful retreat since the signing of the peace treaty in 1979.

"It's all over. We're just waiting until our school closes on March 26, and then we'll go away with our dreams and our disappointments," said Yaacov Bar-Levy, 34, manager of an Ophira youth hostel and head of the Sharm el-Sheikh area settlers' committee.

He added, "What Israel doesn't need is a war of Jews against Jews. Okay, we live in a democracy. But if this democracy goes to an active resistance, I will oppose that. Most people here are just waiting until the end."

The end, officially, will be April 25, the deadline for the completion of Israel's withdrawal from the Sinai under the terms of the peace treaty. But for many, it will come sooner than that, and for some it has already come.

Some residents here say they will date the end from Feb. 10, when Israel's Ministry of Communications literally will pull the plug on the southern Sinai, cutting off telephone service except for a few emergency lines beamed by radio transmitters.

For the resort hotels and holiday villages along the Gulf of Aqaba, where superb beaches and some of the best scuba-diving reefs north of the equator used to attract thousands of visitors a month, the end probably will be March 31, which is when the hotel staffs have been told to leave.

But the southeastern Sinai coast already has the smell of death in places.

The holiday village of Neviot, halfway between Eilat and here, already has closed, and the only signs of life on the beach these days are backpacking European youths and a few Bedouins who hang around looking for day work or trying to sell seashell necklaces to the few Israeli tourists who still stop by for a last look. At the adjacent settlement farm, the last crop of melons has been harvested, and the remains of this season's flowers are being cut for export to Europe.

"People here are realistic," said Allon Emmanuel, 33, Neviot manager who settled in the village in 1972. "We don't live in a fantasy world like they do in Yamit. We know we can't stay. We know the peace process is like a bulldozer, moving along slowly without anything strong enough to change it. All the little controversies about not leaving are irrelevant. The fact is, we are leaving."

Emmanuel said his last task is to keep Neviot in good repair until the Egyptians take it over, and to succeed he has had to post 24-hour guards to keep backpackers from breaking into the hotel bungalows and Bedouins from stripping the farm of its equipment.

At the nearby Dizahav settlement, the farm already has been closed and a handful of government workers are trying to keep some hotel rooms open for tourists, although the place is all but deserted.

At Naama Bay, just north of Ophira, the 130-room Marina Hotel has all but been taken over by American construction workers from the nearby multinational base, and in town the Clifftop Motel has been turned into a dormitory for 150 Thai construction workers who also are working on the base.

The multinational force's new headquarters, which will house 1,000 troops, is about the only sign of constructive activity in the Sinai these days.

There, Robert Taggard, a civilian chief of engineers for the U.S. Army Corps of Engineers, is supervising a frenetic pace of work in anticipation of the arrival of the main body of troops on March 25. The work is being done by a consortium of firms called FAST, an acronym for facilities and support team.

"We're trying to do in six months what normally would take nine months to a year," said Taggard, who is from Silver Spring. He added, "We feel we can meet the deadline. It may not be perfect, but everything will be complete and operational." Ground was broken on Nov. 3.

Working six, 10-hour shifts a week, the construction crews already have moved 200,000 cubic yards of earth on the 150-acre site, installed utilities, erected dozens of prefabricated barracks and now are preparing to build mess halls, officers' clubs, bachelor officers' quarters, a theater, library and headquarters buildings.

A similar base is being built for another 1,000 peace-keeping troops at the abandoned Israeli Eitam air base near Yamit, and Taggard recently sent a deputy into the inhospitable, mountainous interior to find locations for small observation posts for monitoring Egyptian demilitarization along the Israeli border. Only civilian police officers with light weapons will be allowed in the buffer zone, which varies in width from eight to 16 miles.

A small naval unit of the multinational force will be based at an abandoned Israeli base at Ophira and will patrol the Tiran Strait, through which all shipping to Eilat and Jordan's port of Aqaba pass.

At Ras Nasrani, the narrowest point at the mouth to the Red Sea, two destroyed Egyptian cannon lie rusting on their mounts, pointing across the strategic strait to the Saudi Arabian islands of Tiran and Sanafir just 400 yards away. The guns were spiked by retreating Egyptian troops when the Israeli Army swept across the Sinai in 1956.

Tiran, which is inhabited only by sea gulls and a few osprey, and Sanafir, which is snake-infested, were turned over to Egyptian control by the Saudis in the early 1950s to effect the Egyptian blockades of the Gulf of Aqaba that in turn led to the 1956 and 1967 wars.

Under an Egyptian-Israeli agreement, the multinational force and Egyptian police patrols will control the islands, which Israel had feared would be returned to Saudi Arabian control after April 25.

In pulling back from the Sinai, Israel's largest logistical operation ever, the Israeli Army has abandoned three major air bases and has evacuated 103 infantry and armored corps camps. The job has entailed transporting 3,500 buildings, shipping 8,700 tons of equipment and dismantling 150 miles of water pipeline.

Any military equipment the Army cannot move will be destroyed.

In the last 14 years, the Israeli government invested $17 billion in the Sinai, including $10 billion for air bases and Army facilities, $5 billion in developing the Alma oil fields along the Gulf of Suez and $2 billion for settlements and roads. Additionally, the cost of redeploying the Air Force and Army in the Negev Desert has cost $4.4 billion, plus another $1 billion paid by the United States for construction of two new air bases in the Negev.

But a larger cost, according to many of the 5,000 Israelis who moved to the Sinai to make a better life for themselves, was in human terms.

Roland Craaf, 31, a Tunisian-born Israeli who moved here from the Negev city of Dimona four years ago, has been living with his wife in a three-room apartment for which he pays $35 a month, including all utilities. For his trouble in being in the vanguard of what the government hoped would be a large and strategic Israeli presence in the Sinai, Craaf will be paid $62,000 compensation. But he says he would rather stay and continue working as a waiter for the Egyptians.

"I think this is the most beautiful place in the world, and if we really have peace with Egypt, why can't I stay?" asked Craaf. "Peace is the first big problem of my life. Before, I lived without any problems, but now because of peace, that is all I have."