Dayan Dies

TEL AVIV, Israel--Moshe Dayan, Israel's former defense and foreign minister, died yesterday at a Tel Aviv hospital of a heart attack. The statesman, famous for his work in framing the Camp David peace accords with Egypt, was 66-years-old. Prime Minister Menachem Begin has ordered a state funeral for Dayan, an Israeli government an- nouncement said.

Dayan entered Tell Hashomer Hospital with breathing difficulties Thursday, and was put in intensive care a hospital spokesman said yesterday. Dayan had been treated for cancer previously.

Dayan served as a battalion commander in Israel's 1948 war of independence, as chief of staff in the 1956 Sinai campaign, and as defense minister during the 1967 and 1973 Arab-Israeli wars.

In 1979, when President Jimmy Carter flew to Israel for a last effort to conciliate Egypt and Israel, Dayan--then foreign minister--suggested concessions on Israel's oil demands and on accelerated withdrawal from the Sinai peninsula.

Dayan's suggestion of concessions was a major reversal of opinion. Prior to Carter's visit, Dayan had often said that Israeli control of Sharm el-Sheik, the strategic point on the southern tip of Sinai peninsula which controls the entrance to the gulf of Arabia, was worth more than a peace treaty with Egypt.

"My policies often change, sometimes radically," Dayan once told an Israeli interviewer. "But so do circumstances. I like to think of myself as one of those people who adapt themselves to changing circumstances, who react to the changes, and who sometimes help to create them."