Egyptian President Anwar Sadat is to arrive in Israel Saturday night for a historic two-day visit during which he will present the Arab case to the Knesset.

Prime Minister Menahem Begin, in announcing that Sadat would address the Israeli parliament Sunday afternoon, expressed the hope that this first visit by an Arab leader to the Jewish state "will open a serious negotiation for Middle East peace."

Sadat in Jerusalem! The news that the leader of the Arab world is really coming - and less than 48 hours from now - has thrown this country into a state of tremendous excitement, and touched off a frenetic burst of activity.

Sadat's advance party, about 60 Egyptian officials who will work with the Israelis in hastily making security and protocol arrangements for the unprecedented visit, will arrive here between 8 a.m. and 9 a.m. Friday abroad a special Egyptian military plane.

Begin, who jubilantly broke the news that Sadat would be here by the weekend to a group of visiting U.S. congressmen, disclosed that he had known since yesterday that he Egyptian leader wanted to come on Saturday.

"He asked what time he should come so as not to desecrate the Jewish sabbath," Begin said. The Israeli leader said he sent back a message sayingthat between 7:30 and 8 p.m. - shortly after sunset - would be a good time to arrive.

Sadat will stay two nights, Begin said, and has expressed a desire to pray Sunday morning at the silverdomed Al Aqsa mosque in East Jerusalem - the third holiest place for Moslems after Medina and Mecca. "All preparations will be made to make it possible for him to pray at this sacred shrine of the Islamic, faith," Begin said.

Sadat's gesture of praying at the Aqsa mosque on the first day of the Moslem Feast of the Sacrifice cannot help but make a great impression throughout the Islamic world. Only the other day, King Khaled of Saudi Arabia declared that the Moslem world must free Aqsa from the grip of the Israelis.

The entire area around Al Aqsa is under the control of Moslem religious authorities, but it lies within Israeli occupied East Jerusalem. While Israel has often vowed that it will never again permit Jerusalem to become a divided city, no country in the world recognizes the Israel annexation of East Jerusalem.

Security during Sadat's visit to the mosque will be as tight as the Israelis can make it. Many Palestinians in East Jerusalem disapprove of Sadat's visit to Israel and regard it as a potential sell-out of their cause.

The potential for trouble was evident today in the occupied West Bank town of ablus, where about 200 Palestinian youths roamed through the streets chanting, "Sadat - traitor."

It is also not forgotten here that Jordan's King Abdullah, the grandfather of King Hussein, was assassinated by extremist Palestinians on the steps of Al Aqsa in 1951. Abdullah, too, sought to reach an understanding with the Israelis.

All police leaves have been cancelled and the lights will burn in government ministries all night tonight as plans for the visit are put into motion. No cars will be allowed along the route of Sadat's motorcade.

Begin said he also hoped to persuade Sadat to visit Yad Vashem, Israel's memorial to the extermination of 6 million European Jews in Nazi Europe, but that he did not know if Sadat would accept.

Also in question was whether or not a state banquet will be held on Sunday night. Begin said he would have to wait for Sadat's advance party to arrive before a decision could be made.

After the Sunday morning prayer at Al Aqsa, within the old walled city, Begin said that talks between him and Sadat would begin. At 4 or possibly 5 in the afternoon, Sadat will address the Knesset. He speech will be followed by a reply from Begin.

If Sadat decides to speak in Arabic, which like Hebrew is an official language of the Knesset, Begin will replay in Hebrew. But if Sadat speaks in English, then Begin intends to reply in English.

Begin said that he hoped Sadat's visit would lead to substantive negotiations, but if not it was at least "a good start" to peace negotiations. There is no contradiction between the visit and the reconvening of a Geneva Conference, he said.

Virtually all political parties in Israel have welcomed the Sadat visit. Even the Communists, who initially opposed it, appear to be coming around.

The Labor Party is caught in the embarrassing position of having its two top leaders, Shimon Peres and former Prime Minister Yitzhak Rabin, now out of the country. It is expected that they will make every effort to return.

Last night, Prime Minister Begin told visiting Jewish leaders that overtures concerning the possibility of a Sadat visit had been hinted at during the last 28 days by both the Romanians and the Americans.

Radio Israel reported that Sadat and his party would stay in Jerusalem's King David Hotel, but this could not be confirmed by official sources.

Estimates of the number of journalists that may descend upon Israel range from 2,000 to 4,000. It is probable that only one television crew will be allowed into the Knesset to film the historic speech on a pool basis for the world, and that only a handful of other journalists will be allowed within the Knesset itself.

The prospect of the leader of the Arab world, in the capital of a country with whom Egypt is still technically at war; addressing the Knesset under the brooding portrait of Theodore Herzl, the founder of modern Zionism, is almost too much for people here to accept.

The importance of the visit is being compared with President Nixon's visit to China, but in this case the hostilities involved go back much further into history.

Prince Feisal, who helped raise the revolt in the desert with Lawrence of Arabia in World War I, met with Chaim Weizmann, who was much later to be the first president of Israel, 60 years ago. But they were then only the heads of national movements rather than political leaders of sovereign countries.

The conflict between Arabs and Jews in the Middle East goes back to the first Zionist settlers in the 19th century. As early as 1905, an Arab historian wrote: "Two important phenomena of the same nature, yet antagonistic, manifest themselves nowadays in Turkish Asia, but have attracted very little attention. They are the awakening of the Arab nation and the latent efforts of the Jews to reconstitute, on a large scale, the ancient kingdom of Israel. These two movements are destined to fight each other continually."

That observation still stands today but Sadat's visit is at least a hopeful sign that one day the cycle of hostility can be broken.