Menachem Begin, seemingly destined to be the next prime minister of Israel, made a dramatic visit to an illegal Jewish settlement in the occupied West Bank today and appeared to announce a reversal of 10 years of Israeli policy concerning the occupied territories.

At the unauthorized Jewish settlement of Kaddum, about 12 miles southwest of Nablus in the heavily populated heartland of Arab Samaria, Begin announced, "We stand on the land of liberated Israel, settled and made flowering by the wonderful pioneers and workers of the soil," according to press reports.

There will be "many" such settlements in the area that had been officially off bounds for Jewish settlements, he added, according to reporters who accompanied him.

In Tel Aviv, acting Prime Minister Shimon Peres told his defeated Labor Party that he was rejecting Begin's invitation to join with Begin's rightist-Likud party in a government of national unity.

Begin's visit to the West Bank came as two key Arab presidents, Hafez Assad of Syria and Anwar Sadat of Egypt, were meeting in Riyadh with Saudi Arabian Prince Fahd. A prime topic was believed to be the election victory of Likud.

For 10 years the government of Israel has resisted calls for the annexation of the West Bank territories captured in the 1967 war and has licensed Jewish settlement only in the Jordan River Valley and in the hills around Jerusalem as a security belt.

Jewish settlements in the areas heavily populated by Arab have been forbidden because "Israeli government policy has been that these areas could one day be returned to Arab sovereignty in return for peace.

A spokesman for Begin's Likud Party, Arieh Goldstein, said that the visit to Kaddum had been planned long before the election and that the purpose was to present a Bible to the settlement's synagogue. But what might have passed with little notice when Begin was considered just a hardline leader of the opposition has wide repercussion now that he is slated to become prime minister.

Likud is on record as favouring the annexation of the West bank, some say in defiance of United Nations Resolution 242 - which envisions the return of territory and which the government of Israel has always accepted. The Likud argument is that concessions might be made elsewhere, as in the Sinai, but not on the occupied West Bank.

The U.S. government is on record as saying that Jewish settlements on the West Bank are an obstacle to peace.

According to official government sources, Begin said there would be no future need for Kaddum, the army base where the illegal settlers were allowed to set up camp. Instead, the settlers would be allowed to build "Eilon Moreh," a site near Nablus where the Kaddum residents had originally intended to settle. The government prevented them from doing so.

The name comes from the Bible and the significance is clear to every religious and nationalistic Jew who believes in the annexation of the West Bank:

"And Abraham passed through the land until the place of Sichem [the Biblical name of Nablus] unto the plain of Eilon. Moreh and the Cananite was then in the land. And the Lord appeared unto Abraham and said, 'Unto they seed will I give this land . . .''' - Genesis 12, Verses 6 and 7.

Begin was reportedly cheered wildly by the 200 or so residents of Kaddum when he said, "There will be many Eilon Morehs."

The Kaddum settlers belonged to the Gush Emonim (faith block), a deeply religious, fundamentalist group who believe that all of the ancient land of Israel should belong to the modern Jewish state. They have never represented the thinking of Israel's majority and the government has heretofore resisted their claim.

They were allowed to settle because of the ambivalence of the Labor government. Although it opposed their aim, it was reluctant to risk a political crisis by throwing Jews out of the historic land of Israel by force.

A compromise, which the government said was only temporary, was worked out in December 1975. The settlers were allowed to set up camp within the army base of Kaddum.

Prime Minister Yitzhak Rabin announced last October that the government had decided there "will not be a permanent settlement at Kaddum." He said the settlers would be moved to another location within a short time.

The matter was conveniently swept under the rug. On a visit to Kaddum last December for the first anniversary of the settlement, I found all the trappings of permanency, with the residents beginning to pave the roads.