The Reagan administration, which has been "reassessing" continued U.S. support for the International Atomic Energy Agency since that body rejected Israel's credentials at its annual meeting in September, has decided to resume participation in agency activities, the State Department said yesterday.

"The interagency group that examined the problem concluded that the agency is critical to our national security interests, and that no alternative is available to us in the foreseeable future," said Deputy Assistant Secretary of State James B. Devine.

The agency, a specialized U.N. organization, promotes the use of nuclear technology for peaceful purposes and is the only world body that attempts to prevent the diversion of nuclear material for use in atomic weapons.

Because of a congressional amendment passed last year, Devine said, it is "questionable" whether the United States will be able to end its boycott in time to attend an IAEA board meeting in Vienna Feb. 23.

The amendment, sponsored by Sen. Robert W. Kasten Jr. (R-Wis.), stipulates that the United States cannot make further payments to the agency until the "board of governors of the IAEA certifies to the United States government that the state of Israel is allowed to participate fully as a member nation in the activities of that agency."

Since the rejection of Israel's credentials applied only to the September meeting, Israel is entitled to take part in the agency's activities. Thus, the amendment appears to force the Reagan administration to seek specific affirmation that Israel's IAEA membership is in good standing.

Administration sources say they believe they now face a major new diplomatic problem, particularly since Congress also slashed $4 million from the $14 million the United States had pledged to the atomic agency.