The Reagan administration, retreating from a key tenet of its arms control policy, will propose sharply limiting on-site inspections under a superpower treaty eliminating medium- and short-range missiles, U.S officials said yesterday.

The proposal was approved by President Reagan over the weekend and sent to U.S. negotiators who plan to present it to the Soviets today at the arms negotiations in Geneva, the officials said.

The proposal would retract previous U.S. demands for continuous on-site inspection of Soviet missile production, assembly and maintenance plants, the officials said. It would also sharply limit the right of either side to send a team of inspectors on short notice to the site of a suspected treaty violation in the other's territory -- a procedure the administration has long demanded in response to alleged Soviet violations of previous arms treaties.

U.S. officials said the principal reason for the shift is opposition from U.S. intelligence agencies and European allies to Soviet inspection of sensitive Western military facilities.

A secondary reason was the Soviet agreement in July to give up medium-range and short-range missiles on a global basis, not just in Western Europe. U.S. officials said this decision makes it harder for the Soviets to deploy covert missile forces because associated missile assembly and maintenance facilities would all have to be destroyed.

The U.S. shift comes at a time when the Soviets, in a reversal of their traditional policy, have stressed the need for on-site inspections and aggressively demanded access to facilities that Western governments want declared off-limits.

Specifically, the Central Intelligence Agency, the National Security Agency, the Federal Bureau of Investigation and the Department of Energy demanded that so-called "challenge" inspections be prohibited in areas where sensitive intelligence-gathering equipment or nuclear weapon technologies might be observed. Similarly, Britain and West Germany objected to Soviet challenge inspections of suspected U.S. missile deployment sites near their own sensitive military bases.

Senior U.S. officials were hard-pressed to explain the reason for the administration's apparent change of heart, but one said that the intelligence agencies feel they had been "snookered" into supporting the sweeping inspection demand by administration conservatives on the grounds that the Soviets would never accept it.

The Soviets, however, have surprised the administration by essentially accepting the U.S. notion that such challenge inspections should be conducted anytime and anywhere a potential treaty violation is suspected in recent negotiations on the elimination of chemical weapons.

"As you can see, we are expanding the area of confidence to the maximum extent by opening up the territory of the U.S.S.R. to inspections," said Soviet foreign minister Eduard Shevardnadze on Aug. 7 in demanding mandatory access not only to U.S. military facilities in Europe but also to suspected U.S. chemical weapons production plants or storage sites. "This is new political thinking in action," Shevardnadze said.

Under the new U.S. proposal, "U.S. and Soviet access for challenge inspections will be limited to just a handful of sites," an administration official said.

Challenge inspections in Western Europe, where U.S. Pershing II and ground-launched cruise missiles have been deployed, would be barred entirely, as would such inspections in Eastern Europe. Only suspected missile base or support facilities in the Soviet Union and the United States would be subject to inspections, and first they would have to meet a set of narrow criteria to be negotiated in advance.

In addition, challenge inspections would be permitted only within the first five to 10 years after the missiles are eliminated, according to the U.S. proposal.

One U.S. official predicted that the administration's retreat on this issue will not only give the Soviets "the moral high ground" but also eventually undercut the U.S. position in the chemical talks.

"It's really hysterical that we're running in opposite directions at top speed," the official said. "You can just hear the whooshing in the night as we pass by."

Another U.S. official said that "clearly the same individuals and agencies who have argued we can't have the Soviets in our back yard looking for missiles are going to make the same case on chemical weapons."

When the administration first demanded sweeping access to suspected sites of illicit Soviet activities under the chemical weapons treaty in 1984, Vice President Bush told the 40-nation Conference on Disarmament that "this goes beyond anything" the United States proposed before and added that it came at a "price . . . the United States government is willing to pay."

Many experts have considered the sweeping challenge-inspection provision a unique feature of the administration's arms control policies, and some U.S. officials said it would have to be included in every arms treaty because of past Soviet treaty violations.

Because of what it described as the extraordinary difficulty of verifying Soviet compliance with limits on mobile medium- and short-range missiles, the administration also spent millions of dollars studying and developing a highly intrusive system for tagging Soviet missiles and monitoring everything going in and out of missile production, assembly and maintenance plants.

But this on-site inspection proposal was also jettisoned by the administration in interagency deliberations last week over the objections of the Arms Control and Disarmament Agency.

Under the new U.S. proposal, on-site inspections will still be required during the dismantling and destruction of the U.S. and Soviet missiles and support facilities covered by the treaty, a proposal that the Soviets have already embraced.

Still at issue in the negotiations are the period during which U.S. and Soviet missiles must be reduced to zero, and whether 72 U.S. warheads on Pershing IA short-range missiles owned by West Germany should also be eliminated.

Some officials predicted that the abandonment of most on-site inspection requirements would eventually be accepted by the Soviets, but they also said it could heighten uneasiness about the treaty among conservatives on Capitol Hill. A group of senators led by Jesse Helms (R-N.C.) recently wrote to Secretary of State George P. Shultz supporting on-site inspection and urging that it be retained.

A defense official acknowledged that he is "uncomfortable" with the new proposal, but said he is "persuaded that it was the most reasonable approach" given the anxiety of the U.S. intelligence community about potential security breaches. "Given the past Soviet record, all of these agreements are crap shoots to one degree or another," the official said.

But James P. Rubin, assistant director of the private Arms Control Association, praised the administration for "walking back to reality after painting itself into a corner by exaggerating Soviet compliance behavior to the point where they needed these intrusive measures."

Intrusive on-site measures are not needed to verify Soviet compliance, Rubin said, noting that the intelligence agencies presumably decided that remote surveillance would be adequate. "This gets us back to the kind of verification that past administrations would have proposed," Rubin said.