Israel declared today that it has reached the limit of its concessions with the withdrawal of its armed forces and civilian settlers from the Sinai Peninsula and will turn its attention to increasing Jewish settlements in the occupied West Bank and Gaza Strip.

Defense Minister Ariel Sharon, in a statement read at military bases throughout the country, said that settlements are "an integral part of our security" and that Israel would turn to "increasing and consolidating" Jewish communities in the occupied territories.

He said that in returning the northern Sinai town of Yamit, which was razed by Israel in anticipation of the turnover, Israel had "reached the red line of our concessions."

Meanwhile, Prime Minister Menachem Begin and Egyptian President Hosni Mubarak, in a telephone conversation shortly after the Israel withdrawal was completed at noon, committed themselves to "peace forever," a Begin aide said. He said Mubarak called to congratulate Begin for fulfilling the terms of the peace treaty signed three years ago.

Israel completed its pullback--15 years after its Army captured the Sinai in the 1967 Six-Day War--with barely a token ceremony to mark the historic event as its troops moved out of Sharm el-Sheikh on the Red Sea coast.

The chief of the Israeli Army Southern Command, identified only as Brig. Gen. Aharon, because of censorship restrictions, read an order to the garrison there that obliquely alluded to the possibility of a return to the Sinai by the Israeli Army, which had captured the peninsula in 1956 and again in 1967.

"We are leaving the Sinai primarily for ourselves, our sons and our next generations. This we do in order to try a different path from the path of war, the way of hands stretched out in peace," the commander said. "But if in the future it turns out that we were mistaken and were led astray, our people will know how to unite and correct the wrong."

In the occupied West Bank, the turnover was marked by demonstrations. Palestinians protested the peace treaty by attempting to seize a police station in the town of Tubas. An Arab policeman was injured. In Nablus, security forces broke up a demonstration and in several other towns protests were held.

Begin said today that no comparison can be drawn between the Sinai withdrawal and possible territorial concessions in the West Bank. Speaking on NBC's "Meet the Press," he said the Sinai Desert can be placed under adequate surveillance, but the West Bank cannot.

When asked about possible annexation, Begin replied, "You can annex foreign land. You cannot annex your own country. Judea and Samaria the biblical names for the West Bank are part of the land of Israel, where the nation was born."

At the resort village of Diklia in the northern Sinai, Israeli security forces found 10 militant settlers who had infiltrated back into the Sinai after being evacuated. They were arrested and taken back across the border.

Two permanent border terminals have been opened in the northern Sinai--in Rafah and at Nizana, just south of Rafah--and a temporary border facility has been opened at Taba, the area near Eilat where border demarcation is still in dispute.

In his statement, Sharon emphasized the sacrifices Israel has made for the peace treaty, saying, "The sands of the Sinai Desert--which have been with us since the birth of the nation which is once again consolidating and holding onto the land--are soaked with the blood of our fighters. They, like all the others who have fallen in Israel's wars, have brought us the prospect of peace through their endurance, ability to contend and sacrifice."

Sharon added, "We are not withdrawing from Sinai. We are demonstrating our desire to move forward toward peace.

"The ruins of Yamit will also serve as testimony that we have done everything imaginable to keep to the peace agreement, so that our children will not point an accusing finger at us and say that we missed an opportunity."

Opposition Labor Party leader Shimon Peres tonight sent congratulations to Begin on completing the withdrawal, although Peres said that many mistakes had been made by the government and that Yamit should have been left standing as a monument to peace.

There still was no official explanation why Yamit was razed, although government sources said that it was necessary to discourage militant settlers from infiltrating back into the town at the last moment and possibly delaying the turnover. Previously, settlers had returned time after time to evacuated agricultural settlements near Yamit until the settlements were bulldozed.

Sharon said, "We were compelled to erase it from the face of the earth to implement the peace agreement on time without spilling Jewish blood."

In a Cabinet meeting today, Begin and his ministers praised the Israeli Army for the Yamit evacuation, saying soldiers never had faced a more difficult and painful task and the operation had been "carried out without the shedding of one drop of blood."

Following the meeting, Begin released a telegram he had sent to Jihan Sadat, widow of the assassinated Egyptian president, saying, "Our hearts, Madam, go out to you and the children and grandchildren. Anwar Sadat, of blessed memory, should have been with us to see the glory of his effort to make peace and achieve reconciliation between the good peoples of Egypt and Israel.

"To prove that his memory did not die, but that it will live forever in the hearts of women and men of good will, we all have to work for the sacred cause: no more war, no more bloodshed. Peace, salaam, shalom between our nations."