Secretary of State George P. Shultz, warning that "the Soviet Union has no higher-priority goal than to intimidate NATO" into canceling deployment of new medium-range missiles in western Europe, said yesterday that "the alliance cannot, and will not, permit this to happen."

Speaking at Stanford University's commencement, Shultz expressed satisfaction that members of the North Atlantic Treaty Organization are determined to begin deploying Pershing II and cruise missiles in December if U.S.-Soviet negotiations in Geneva fail to produce an agreement on reduction of such intermediate-range nuclear weapons.

NATO agreed in December, 1979, to deploy the U.S.-made missiles, capable of striking deep into the Soviet Union, if the Geneva talks prove fruitless. Despite Soviet threats and heavy pressure from anti-nuclear forces in western Europe, alliance leaders, acting at the Wiliamsburg economic summit last month and then at the NATO foreign ministers meeting in Paris last week, reaffirmed the deployment plan.

Those decisions formed the basis of Shultz's contention yesterday that NATO, after 34 years, remains resolute in its determination "to prevent war by ensuring that the cohesion, strength and collective will of the democracies would never again be doubted by any adversary."

He spoke against a background of a troubled year that saw a serious rift between the United States and its allies over European support for construction of the trans-Siberian gas pipeline.

It also saw conservative governments in West Germany and Britain, two of the nations where the missiles will be stationed, beat back electoral challenges from opposition parties that sought to capitalize on pacifist feeling by opposing or expressing doubt about deployment.

Pointing to reaffirmation of the deployment decision and efforts to avoid a repeat of the pipeline dispute, Shultz said, "Thus, for all our occasional squabbles, the democratic nations have not forgotten the paramount importance of the values and interests we have in common."

"We cannot find security in arms alone," he noted. "We are willing to negotiate differences, but we cannot do so effectively if we are weak, or if the Soviet Union believes it can achieve its objectives without any compromise. Therefore, both these tracks--strength and diplomacy--are essential."

"The unprecedented expansion of Soviet power over the past two decades cannot be ignored or rationalized away. Any president, any administration, would be forced to respond . . . . Surely the burden of proof is on those who would undo the present military balance, or alter it or conduct risky experiments with unilaterial concessions without genuinely reducing the levels of armaments on both sides."

Noting that the Soviets have more than 1,000 nuclear warheads on their new intermediate-range SS20 missiles, Shultz said of the U.S. position in Geneva:

"We are willing to eliminate this entire category of nuclear weapons from the face of the earth, and we are prepared, as an interim step, to reduce these forces to any equal, verifiable level."

He added: "If negotiations do not succeed, we must be prepared to deploy at the end of this year . . . . At Williamsburg and at NATO, we saw an impressive consensus on security and arms control.

"This is a firm ground for confidence that war will be deterred, that stability will be maintained and that we will have a chance at least to reach reliable agreements making the world that you inherit a safer place."