AFTER NEARLY thirty years of conflict, the recent breakthrough in relations between Israel and Egypt comes as a welcome surprise. Egyptian President Anwar el-Sadat's historic trip to Israel was a symbolic gesture that may signal a break in the seemingly endless escalating cycles of hostility in the Middle East. Similarly, Sadat's request last week for a meeting in Cairo, as soon as possible, of all nations and Palestinian representatives involved in the complex Middle East situation to discuss the upcoming Geneva peace talks is heartening. Again, Sadat's move was a welcome one, although it still lies in the realm of the psychological gesture. To be sure, the Sadat initiatives raise more questions than they resolve.

Sadat's initiative and the journey itself required a great deal of personal courage. On a more substantive level, the Sadat trip shows that Egypt and Jordan, the only other Arab nation to endorse the journey, albeit unofficially, have finally recognized Israel's right to exist, obviating a problem that has blocked the path to a peace settlement since the establishment of the Israeli state in 1948.

It is incumbent upon Israel to show an equal willingness to negotiate on realistic terms. The true test of Prime Minister Menachem Begin's government is not in merely receiving Sadat in proper form, but in furthering the progress of this unexpected chance to break the diplomatic stalemate in the Middle East. The biblical rhetoric that Begin espoused must give way to a more flexible and realistic bargaining position. As Foreign Minister Moshe Dayan said last week, Israel must quickly re-examine its past positions and develop its ultimate attitude on important questions such as its borders, the existence and location of a Palestinian state, and the nature of the settlement itself.

Critics have questioned Sadat's motives for initiating the breakthrough, pointing to Egypt's unstable financial and social conditions, but the motives are less important right now than the possible results. Sadat's move is well-considered and prudent. For example, he has left the door open for a search for the best possible representation of the Palestinian refugees, a difficult objective that should be sought. The bitter criticism heaped on Egypt by other Arab nations including Syria and Libya is unjustified and counter-productive, and Sadat and Israel should continue to negotiate in preparation for Geneva no matter who else joins or criticizes. The other alternative is the kind of step-by-step diplomacy practiced by the United States under Henry Kissinger, which produced only a stalemate.

What is perhaps most encouraging is the apparent lack of direct big-power involvement in the current thaw. The Soviet Union, which will not attend the Cairo talks, is being negative, and the United States, apparently taken by surprise, should support this first step forward as much as possible.

In a situation as tangled as that of the Middle East, only one thing is abundantly clear: enough blood has been shed by everyone involved. Sadat's initiatives could be the opening to the chance of a generation to end the conflict. Each side must be realistically prepared to compromise, or else the precious new dialogue will be discontinued. Egypt's initiative and the corresponding Israeli response are just the potential first steps towards the achievement of a fair and permanent Middle East peace settlement.