Letter from Israel: land of Moses and MacDavid cheeseburgers

''We're going to Sinai,'' piped four-year-old Michael, the son of an American colleague. ''I'm going to swim in my horse ring. . . .'' Crack went another image, as I contemplated Sinai - modern synonym of conflict, seized by Israeli tanks in 1967, about to be returned to Egypt - as the playground of a small boy in an inner tube on a camping trip to the Red Sea.

Israel is like that. For the first-time visitor, abstract impressions from newspaper articles suddenly deepen and widen into new dimensions; human, economic, biblical.

Children play where tanks rumbled and Moses walked. The West Bank, for so long just a headline and a diplomatic tangle, becomes rounded sandy hills covered with rocks, shining pale gold in the sunset, where small children herd thin black goats.

Israeli West Bank settlements, the source of so much controversy, turn out to be clusters of concrete apartment blocks, or strings of lights against the blue-black night that falls as suddenly as a curtain across the Dead Sea and the Jordanian hills beyond.

The sea itself is slowly drying up for lack of rain in the past three years. From the ramshackle gate and its coils of barbed wire we drove across land that had been under water to reach the present edge. To one's touch, the water is oily, being 30 percent salt. The taste of it, dried on your fingers, is sharp. It is Israel's one natural resource, providing chemicals and fertilizer for export.To be here and to conceive of Israel's going back to its pre-1967 boundaries is very difficult.

Michael's parents worry that when Egypt regains Sinai in April next year (under the Camp David agreements) Egyptian officials may not permit free access, letting residents explore and camp as the Israelis now do.

Other more everyday effects of a young country still on a war footing can be seen everywhere.

Take the bus from Tel Aviv to Jerusalem and you ride for an hour in an arsenal. Young soldiers on national service carry machine guns as casually as briefcases or bags of fruit. Ominous-looking black muzzles bump into you in the line waiting to board. Only this visitor takes notice.

Girls are in uniform, too - khaki, with soft caps. Soldiers walk and loll and patrol all over the country.

All young men at age 18 go into the armed forces for three years. Every girl goes in for 20 months. Women take basic training for six weeks and learn how to shoot those black guns. Every single year of his life until he is 55, a man goes back into uniform for about a month. It's a way of life.

University students are 20 or older - and more conservative than in many other countries. Until now, few have even questioned the duty to serve, though some complaining murmurs are now beginning to be heard. Young women may, under a new law, escape military service by declaring their objections on religious grounds - but the law is controversial, seen by many as an excuse to shirk.

''You have to remember,'' says an American resident of Jerusalem, ''that every Israeli in his 40s has fought in three fierce wars, his friends killed, no quarter given . . . the impact on society is tremendous. . . .''

Some 60 percent of the Israeli budget each year goes for defense - a staggering sum. Israel spends almost three times as much on defense, per head, per year, than the United States does - $1,835 compared with $759.

In 1981 that was 23.2 percent of the Israeli gross national product. The US spent 5.5 percent.

It all helps boost inflation, which ran at 135 percent last year.''Well,'' said small, dark, wiry, assertive Aryeh Zarzer, the guide who showed us Jerusalem, Bethlehem, Jericho, and the Dead Sea, ''it's not so bad. Our wages are index-linked to inflation, so they went up 135 percent too. This year the rate might be under 100 percent. . . .

''Of course, our mortgage payments are also indexed, so they went up 135 percent. My savings are indexed - my 20-year-old boy will be out of the Army in a year and we have to send him to university . . . but my payments toward his education money are indexed as well. Last month I had to pay 500 shekels. . . .

''In US dollars, that's $35.70. But to Aryeh, who is paid only for the days he works and who lives in a country where wages are only 25 percent of US levels , it is a lot of money.

The indexing system makes life bearable, but it also pushes up production costs. It fuels the very inflation it is designed to alleviate.

''Who can afford a new apartment these days?'' another Israeli asked. ''About 120,000 American dollars for a place in Jerusalem. . . . There are three ways to get one.'' He ticked them off on his fingers:

''One: start young, buy a place where the government wants you to live and will subsidize you - on the Golan Heights, let's say. Wait a few years, sell at a profit, and move to Jerusalem or Tel Aviv. . . . Two, come here from abroad, and the government will help you - Oh, how they help you! . . . Or three, go abroad, and come back after seven years and you'll qualify for the immigrant aid . . . apart from that, forget it. . . .''

One result of inflation: more pressure to create settlers on the West Bank. Young couples can receive government help by living there. So they do.

It's another reason why settling the Palestinian issue is so difficult.

Israelis yearn for a more normal life for themselves and their children. They still speak in wonder of the late Anwar Sadat's arrival in Jerusalem in 1977, of the hopes that welled up, the tears that flowed.

Many thousands of Israelis have gone as tourists to Egypt since then, but only a few hundred Egyptians have come here.

Israelis want a two-way flow of tourists, to break down animosities, to put substance to the bones of Camp David.

But it isn't easy.

Israel, a modern Westernized country, knows all about package tours: 12 hours by bus to Cairo, $40 round trip; $85 one-way by air. Arabs in Israel go even more cheaply, by Arab taxi from El Arish in Sinai.

But Egypt is not set up for package tours. ''Israelis are curious about Egypt: the reverse is not always true,'' one American here comments.

Many an Egyptian professional man, the likeliest candidate for tourism, would forfeit opportunities and fees in other Arab countries if it were known he had visited ''the Zionist entity.''

Chairman of the Egyptian Chamber of Tourism, Raouf Butros Ghali, told Israeli correspondents in Cairo recently many Egyptians preferred to go to London to shop at the Marks & Spencer clothes chain. Relatively few Egyptians travel abroad each year, and it costs as much to fly from Cairo to Tel Aviv as it does to fly to Europe.

But for many an Israeli, even the little progress so far is stunning: ''The simple act of boarding a plane can bring a tightening in one's throat,'' wrote Haim Shapiro in the Jerusalem Post, ''when the flight is El Al, the place Cairo Airport, and the adjoining boarding area is filled with passengers for a Saudi Air flight to Jeddah. . . .''

The newcomer here tends to think Israel is a highly religious state. I hesitated even to ask if one could make a tour on the Sabbath (Saturday). I was most surprised to be told that the way to Allenby Street in Tel Aviv lay through a red-light district.

''It's a common conception,'' said an American in Tel Aviv. ''Actually, most Israelis are secular. The religious parties do exercise influence, of course - no buses run on the Sabbath, government offices close, hotels must maintain kosher kitchens (strict separation of meat from dairy products), Orthodox Jews don't make phone calls or watch TV, and so on. . . .

''But it's more the case of allowing any Orthodox Jew who wants to, to practice his beliefs. The rest of the country doesn't have to follow suit - but it must tolerate the observances. . . .'' Religious restrictions tend to rise and fall according to the strength of religious parties in the Knesset.

Strict adherence to kosher laws would mean no cheeseburgers. But on Tel Aviv's fashionable Dizengoff Street the MacDavid hamburger stall charges 28 shekels for a plain burger, and 29 with cheese (about $2.07).

In my hotel food that needed to be prepared or cooked was off the menu on Saturdays. I could order juice but not carrot juice: the carrots had to be chopped. No chicken livers, creamed mushrooms, hot open-faced sandwiches, omelettes, hamburgers, or main dishes. I could, however, have cold sandwiches, desserts, borscht, salad. On the meat side of the restaurant, I had paprika, garlic, and parsley margarine on my bread roll. A sign urged ''no smoking'' on the Sabbath.

Israel remains an idea, a concept of law, a tribal people waiting for their Messiah. The conflict with its first cousins in the Arab world, fellow descendants of Abraham, is unsolved.

To visit Israel is to sense the human drama of the conflict - and to yearn anew for these two peoples to find ways to live together and not apart.