A great national debate is under way over how much Israel should be prepared to give in the way of concessions for a chance at real peace with its Arab neighbors.

The debate, which began with Egyptian President Anwar Sadat's historic visit to Jerusalem, is already bringing pressure on Prime Minister Menahem Begin to make decisions he would rather avoid.

The most painful questions center on the future of the occupied West Bank and Gaza, which Begin and his rulign Likud coalition hold to be [WORD ILLEGIBLE] part of the land of Israel.

It may seem odd that in nearly 30 years, the issue of what concessions Israel would be willing to make for peace has never been squarely faced. But, as Foreign Minister Moshe Dayan has pointed out, Israel never before had an Arab negotiating partner that was willing to meet face to face and talk peace.

As long as Israelis felt that no matter what they did, the Arabs would never accept a Jewish state in their midst, there was never any need to make really tough decisions.

Sadat has shattered that concept. His visit has moved Israel a giant step toward what Dayan has called the "moment of truth." While that moment may not have arrived yet, it could well come soon.

Whether Begin can bring himself to compromise with his long and deeply held principles is not known. Much depends, of course, on how negotiations with the Arabs proceed.

Begin himself has maintained what one political writer has called a "sphinx-like silence" on the subject - taking the position that you don't go into negotiations making concessions in advance. On this point, most Israelis agree.

But for those who would divine meaning from straws in the wind, Begin's remarks in London recognizing that there is a Palestinian problem and declaring that Israel wants a solution with "dignity" have significance. Diplomats and journalists who have seen Begin recently say he understands that the Sadat visit has opened up an entirely new prespective.

The possibility also remains, however, that Begin will give nothing of substance in return for Sadat's visit, and that he will consider the visit a vindication of Israel's hawkish line. This school of thought holds that Israel's hawks were correct - that the hard line was what brought the Egyptian President to Jerusalem.

But there are those not only among the opposition, but within Begin's own party, who are talking about the possible need for a reconsideration of the government's hard-line positions.

Although there is a concensus against a complete withdrawal to 1967 lines and against dealing with the Palestine Liberation Organization, talk about compromises coming from people today who would not have talked in this manner before the Sadat visit.

One columnist reported that Begin could count on the support of only six out of seventeen Cabinet ministers if he maintained a hawkish line, and that the rest were either undecided or dovish.

This, however, completely overlooks the power and authority of Menachem Begin.

It is generally conceded here by knowledged political observers that Begin may be put under pressure, but he is the key. It will be Begin who makes the final decision.

Dayan opened the great debate on Nov. 23 when he said on national television that "this time, perhaps, we shall really arrive at true negotiations for a peace agreement. We must decide our last ditch attitudes so that we should not fail in or frustrate that negotiations for peace, which I believe are close at land - at least with Egypt."

The government, Dayan said, must decide soon what it would concede for peace not only in the Sinai, but also on the "Golan Heights and the West Bank and the Gaza Strip as well."

Dayan admired that he, frankly, had not made up his own mind on these issues. But he confessed that he was no longer sure of his long-held position that "Sharm el Sheikh without peace is preferable to peace without Sharm el Sheikh."

Sharm el Sheikh, at the tip of the Sinai peninsula, controls the entrance to the Gulf of Aqaba. Many Israelis, like Dayan, thought that it should never be given back to Egypt even for peace.

Dayan stopped short of saying that the time to draw maps had now arrived. "Not now," he said. "It is too early. But Israel has to be prepared for it so that if we really reach that moment, and we listen and bargain and get to the last-ditch position of the Egyptians, Syrians and others, then we should say whether we prefer peace on the basis of those conditions . . . or whether we would rather have the status quo than accept the conditions they present."

Zalman Shoval, a member of the Likud executive, also recently took the position that Israel might soon have to decide what concessions it "would offer to the Arab states within the framework of a binding peace agreement with them . . .

"No less important however, will be the need to determine on which points she cannot afford to compromise - even if this should doom the chances of an agreement at this stage," Shoval wrote.

The Likud Party's Herut faction, to which Begin himself belongs, has denounced the statements by some of the more dovish members of the government as being unpatriotic.

Begin's largest coalition partner, Yigael Yadin's democratic Movement for Change, differs from the Likud in favoring territorial compromises on the West Bank and Gaza under the right conditions.

Yadin, who is now deputy prime minister, wrote recently that he was convinced that if concessions on the West Bank and Gaza were the only thing standing in the way of real peace, concessions must be made.

Israel must come forward with crystallized proposals for resolving the Palestinian questions for resolving the Palestinian question, basing itself on readiness for territorial compromise in Judea and Samaria," he said.

Perhaps most surprising are the indications that some members of the right-wing religious parties are taking a dovish stand. Zevulum Hammer, Minister of Education and a member of the National Religious Party, said in a radio interview that Sadat's visit had called for second thoughts.

As for what should be given up and in what manner, there are as many theories as there are Israelis. But an idea that has been receiving more attention recently is the idea of a "functional partition" rather than a geographical partition of the West Bank. The idea is similar to one Dayan has held for years. It would entail giving up sovereignty on parts of the West Bank, but retaining security control.

Many Israeli leaders would resist giving up the West Bank in return for demilitarization and internaitonal supervision. "Any 'functional' solution based on complete Jordanian sovereignty in Judea and Samaria is just as potentially risky for Israel's future as any other formula which makes tha preservation of Israel's legitimate rights and needs in the area depedent on the acquisecence and good will of somebody else," Zalman Shoval wrote.

As for the opposition Labor Party, it has always favored some territorial concessions on the West Bank. Former Foreign Minister Yigal Allon's plan would have retained more than a third of the West Bank for Israel. Former Foreign Minister Abba Eban, in a recent review, said that almost all of the West Bank should be given up in exchange for demilitarization, and that the holy places of Jerusalem should be turned into a kind of Vatican City.

Given the strength of the present governement, however, it will be Begin - not the Labor Party - who will decide.