Mr. Abu Sharif said he expected perhaps as many as 100 Arab, African, European and Asian countries to extend diplomatic recognition to the Palestinian state. At the moment, 102 nations recognize the P.L.O. as a liberation movement, allowing its representatives diplomatic status in their capitals.

The Algerian Foreign Minister, Col. Boualem Bessaieh, said his country would be the first to permit an embassy for the Palestinian state.

Ambassadors in Algeria were invited Monday night by callers identifying themselves as representing the ''Palestinian embassy'' to come to a celebration after the declaration of independence. The United States Ambassador here, Christopher Ross, received an invitation but did not attend. American officials are forbidden from meeting with P.L.O. officials.

Palestinians said the declaration of independence is to be the start of a peace campaign that will be outlined later today in a political program describing the P.L.O.'s conditions for peace with Israel in exchange for a nation they can call their own.

Salah Khalaf, known as Abu Iyad, the second-ranking official in Mr. Arafat's Fatah movement, said in an interview here Monday that the Palestinian leadership felt it had to move now to take advantage of a relaxation of tensions between the superpowers and their apparent intention to settle a number of regional crises. Reason for P.L.O.'s Timing

Mr. Khalaf also cited the apparent victory in the recent Israeli elections of an inflexible coalition of the Likud party and religious parties, andthe ascent in Gaza of an Islamic fundamentalist movement of Palestinians opposed to all negotiations. Given that conjunction of hard-line influences, he said, the P.L.O. leadership estimated that it had six months to gain what many Palestinian leaders here refer to now as ''international legitimacy.''

To achieve this legitimacy, members of the Palestine National Council were still debating a political program to be unveiled today. It is intended to establish specific Palestinian ideas on how to seek peace, they said. ''We are entering the peace process with this program,'' said Ahmed Abdul-Rahman, a P.L.O. spokesman.