In a stunning rebuke of Prime Minister Menachem Begin's government, the Israeli commission that investigated the Beirut massacre of Palestinian refugees declared today that Israel bears clear "indirect responsibility" for the slaughter and called for the ouster of Defense Minister Ariel Sharon.

The commission's final report, which said Sharon had "disregarded the danger of acts of vengeance and bloodshed . . . against the population of the refugee camps," plunged the Begin government into turmoil and produced intense pressure for Sharon to resign. The Israeli Cabinet met in emergency session for more than an hour today to discuss the findings but reached no decisions and is to meet again Wednesday afternoon.

Sharon reportedly was initially defiant of the calls for his ouster, indicating that he did not intend to leave the government without a fight. Speaking to supporters in Tel Aviv tonight, the defense minister said it was unimportant what the commission decided and called on Israelis to overcome "manifestations of weakness of resolve" in the country.

The three-member judicial board of inquiry has no power to enforce its recommendations, but the moral authority of the high-level commission is such that it would be very difficult for the government to ignore them.

The report said the September massacre in the refugee camps of Sabra and Shatila south of Beirut was the work of the Lebanese Christian Phalangist militia alone, dismissing reports that Israeli troops or other Lebanese militias were involved. It supported the Israeli Army's estimate that between 700 and 800 people were killed. A Lebanese government inquiry into the massacre has proceeded slowly and has announced no conclusions about who committed the killings.

It was expected that Wednesday's Cabinet meeting would produce the first concrete decisions by the Begin government in response to the report. A senior official said after today's Cabinet meeting that there was near unanimous support for following the commission's recommendations and noted pointedly that they include two possible alternatives for Sharon--resignation or dismissal by Begin.

But Avraham Shapira, head of the Agudat Israel party that is part of the government coalition, quoted Begin as saying at a meeting this afternoon that he would neither dismiss Sharon nor ask for his resignation. Israel radio reported that the prime minister took the same position during the Cabinet meeting.

It appeared that many members of the Begin government hoped the defense minister would take it upon himself to resign, relieving some of the pressure on the government.

Begin remained publicly silent throughout the day as he calculated his next move. His press spokesman Yuri Porat, however, issued a statement stressing that the inquiry had shown there was no connivance between Israelis and Phalangists in the massacre. This, Porat said, was "a certificate of honor that stands above the other findings of the report and balances them."

The opposition Labor Party issued a call for the government's resignation, but its leaders refrained from public comments as they awaited Wednesday's Cabinet meeting and the government's next step.

In its report, the board of inquiry called for the resignation or dismissal of Sharon and made clear it spared Lt. Gen. Rafael Eitan from a similar recommendation only because his term as Army chief of staff expires in April.

Begin was criticized for showing "absolutely no interest" in the actions of the Phalangist militia units after he learned of their entry into the camps. For this "indifference" the commission said he bears "a certain degree of responsibility." But the panel made no recommendation as to Begin's fitness to remain as the head of the Israeli government.

The commission called for the ouster of Maj. Gen. Yehoshua Saguy from his post as chief of military intelligence and recommended that Brig. Gen. Amos Yaron, who was the commander of all Israeli forces in Beirut at the time of the massacre, be demoted from field command for at least three years.

Three other officials who had been warned that they might be harmed by the investigation--Foreign Minister Yitzhak Shamir; Maj. Gen. Amir Drori, the Army's northern commander, and the unnamed head of the country's intelligence service, the Mossad--were criticized to one degree or another but were not subjected to recommendations of dismissal or demotion. Shamir cut short a European tour to return to Israel.

A ninth official who had been warned, Sharon's personal assistant Avi Dudai, was not criticized in the report.

But while exonerating the Begin government and the Army of intentionally seeking the death of the Palestinian refugees, the report painted a picture of carelessness, incompetence and at times moral callousness on the part of government and military officials before and during the slaughter.

The report, while laden with facts and legal arguments, also contained a strong tone of moral outrage on the part of the three panel members--Israeli Supreme Court Chief Justice Yitzhak Kahan, Justice Aharon Barak and reserve Army Maj. Gen. Yona Efrat.

Citing ethical standards established in the Old Testament book of Deuteronomy, the commission members recalled the centuries of persecution of Jews and added:

"The Jewish public's stand has always been that the responsibility for such deeds falls not only on those who rioted and committed the atrocities, but also on those who were responsible for safety and public order, who could have prevented the disturbances and did not fulfill their obligations in this respect."

The sharpest criticism was leveled at Sharon, the main architect of Israel's invasion of Lebanon last June that started the country down the road that led to the Sabra and Shatila refugee camps three months later. It dismissed Sharon's defenses for his actions and said that his "humanitarian obligation" and the likely "political damage" to Israel from the decision to send the Phalangist units into the camps "did not concern him in the least."

Eitan was described as Sharon's "partner" in making and executing the decision and equally responsible for it.

In its 108-page report, released in Hebrew- and English-language versions here this morning, the panel rejected totally the Begin government's contention that it could not have foreseen a massacre when it allowed the Phalangist units into the refugee camps and that it acted as swiftly as possible to end the slaughter.

"In our view, everyone who had anything to do with events in Lebanon should have felt apprehension about a massacre in the camps if armed Phalangist forces were to be moved into them without the IDF [Israel Defense Forces] exercising concrete and effective supervision and scrutiny of them," the inquiry board declared.

There was no such supervision or forethought, the report said. Moreover, the panel added, "it is clear from the course of events that when the reports began to arrive about the actions of the Phalangists in the camps, no proper heed was taken of these reports, the correct conclusions were not drawn from them, and no energetic and immediate actions were taken to restrain the Phalangists and put a stop to their actions."

The commission said the slaughter was the work of the Phalangist militiamen alone. It said it found no evidence that Israeli soldiers or militiamen commanded by renegade Lebanese Army major Saad Haddad, who are supplied and supported by Israel in southern Lebanon, took part in the massacre.

The panel declared that the decision to send the Phalangist units into the camps to find any remaining Palestinian guerrillas following their evacuation from Beirut was made to hold down Israeli casualties and to assuage public opinion in Israel which had grown resentful over the lack of help the Israeli Army was receiving from the Phalangist militia, its other Lebanese Christian ally.

"No intention existed on the part of any Israeli element to harm the noncombatant population in the camps," the report said.

The massacre took place between 6 p.m. Sept. 16, when about 150 Phalangists entered the Sabra and Shatila refugee camps with the assistance of the nearby Israeli Army, and 8 a.m. Sept. 18 when they left. The massacre followed the assassination Sept. 14 of Lebanese president-elect Bashir Gemayel, the commander of the Phalangist militia units, and the move into West Beirut, formerly a stronghold of the Palestine Liberation Organization, by the Israeli Army on Sept. 15.

Even after its exhaustive, 3 1/2-month investigation, the inquiry board said it was impossible to determine exactly how many Palestinian refugees were killed in the camps. It said Israeli Army intelligence estimates of between 700 and 800 "may well be the number most closly corresponding with reality."

The report reconstructed in detail the events of that fateful week beginning with the decision by Sharon and Eitan at 8:30 p.m. on Sept. 15 to send the Phalangist militia units into the refugee camps.

According to the report, Bashir Gemayel, before he was assassinated, made remarks to Mossad officials "that left no room for doubt that the intention of this Phalangist leader was to eliminate the Palestinian problem in Lebanon when he came to power--even if that meant resorting to aberrant methods against the Palestinians in Lebanon."

These and other reports, the commission added, "reinforced the feeling among certain people--and especially among experienced intelligence officers--that in the event that the Phalangists had an opportunity to massacre Palestinians, they would take advantage of it."

The report also disclosed the existence of a split in the Israeli intelligence community over Israel's association with the Phalange. While the Mossad, through years of covert assistance to the Phalange, "felt positively about strengthening relations with that organization, though not ignoring its faults and weaknesses," military intelligence officers were skeptical of the Phalange leadership and leery of drawing any closer to it.

Despite these misgivings, Sharon and Eitan, with the later largely passive approval of Begin and the rest of the Cabinet, ordered the Phalangist militia units into the camps.

In reconstructing the 38 hours of slaughter, the commission report provided new details on the extent of early Israeli knowledge that the militiamen were engaged in indiscriminate killing inside the camps.

It said that at about 7 p.m. on Sept. 16, just one hour after the militiamen entered the camps, an Israeli soldier identified as "Lt. Elul" overheard a radio conversation between a Phalangist officer inside the camps and Elie Hobeika, a Phalangist intelligence officer who was stationed on the roof of a building near the camps that the Israeli Army used as its forward command post.

The officer in the camp reported that they had rounded up 50 women and children and asked what to do with them. According to the commission report, "Elie Hobeika's reply over the radio was, 'This is the last time you're going to ask me a question like that. You know exactly what to do.'

"And then raucous laughter broke out among the Phalangist personnel on the roof. Lt. Elul understood that what was involved was the murder of women and children."

The report said Elul informed Gen. Yaron, the commander of Israeli forces in Beirut who was also at the command post, of the conversation, and that Yaron spoke to Hobeika but nothing further was done.

Later that same first night of the massacre, according to the report, an Israeli intelligence officer reported at a meeting that the Phalangist units "are pondering what to do with the population they are finding inside the camps . On the one hand, it seems, there are no terrorists there, in the camp. Sabra camp is empty.

"On the other hand, they have amassed women, children and apparently also old people, with whom they don't exactly know what to do. And evidently they had some sort of decision in principle that they would concentrate them together and lead them to some place outside the camps."

Yaron, according to the commission report, cut this conversation short by saying the Phalangist units "have no problems."

The commission criticized what it termed institutional flaws within the government and the military and called for further investigation of them. It noted that Begin was not even informed of the crucial decision to send the militiamen into the camps until after the fact, and that the reporting of what was happening in the camps was often sloppy and incomplete.

In what the commission members appear to have intended as a comment on Israeli responsibility for the whole affair, the three investigators chose to close the section of the report that described the events of Sept. 16-18 with a quotation from Yaron at an Army intelligence meeting last October that was called to review the massacre.

"The mistake, as I see it, the mistake is everyone's," Yaron said. "The entire system showed insensitivity. I am speaking now of the military system. I am not speaking about the political system.

"On this point, everyone showed insensitivity, pure and simple. Nothing else."