THE FIGHT in Israel over peace negotiations is the best thing that's happened in the Middle East since Anwar Sadat went to Jerusalem. It shows that Israelis, rather than stand pat on a policy that threatens to cost them a perhaps irreplaceable opportunity for peace, are rethinking the hard questions. Note that the argument lies not simply between the ruling Likud and the Labor opposition, but inside the government and, indeed, inside the very faction of the governing coalition to which Prime Minister Menachem Begin belongs.

The most striking challenge is that of Defense Minister Ezer Weizman, conceivably a successor to Mr. Begin, who said he would resign if his government permitted the expansion of settlements in occupied territories to go on in defiance of his orders as head of military occupation. True, that does not go directly to the larger question of whether Israel should expect to retain those settlements in a peace. But Israelis are far from unanimous that they should keep those in Sinai, or keep them permanently. And across much of the political spectrum, there is more or less open opposition to the government's recently clarified view that the return of territory contemplated in U.N. Resolution 242 did not include the West Bank.

The various aspects of the settlement issue are different in substance and in political implications. It is relatively easy for expansion work to be halted at least until Mr. Begin comes to Washington. He's due next week, and if he then agreed to halt work for a longer period, that would be useful but not necessarily conclusive. More important is the slowly growing recognition that, to keep Anwar Sadat at the peace table, the government must offer both a more forthcoming formula on the Sinai settlements and a position on the West Bank that will let Mr. Sadat draw King Hussein to the table, too. The relevant question for Israelis is not whether they would prefer to hang on to the settlements but whether they would prefer to do so at the expense of losing everything that became possible at Jerusalem last year.

The Israeli government, finding the debate painful, will naturally try to fragment and divert it, most likely by appeals to the deep and diplomacy-paralyzing security emotions so many Israelis have felt practically since birth. But if, as we suspect, Israel needs at least one racking internal crisis to concentrate its best judgement, then it is a debate that friends of Israel must urge on.

The United States' role is to help force debate, by remaining steadfast in its own view - which we find to be generally a correct and courageous one - of what the peace process requires. Some Israelis, and some American Jews, are tempted to play up the aspect of Israeli-American confrontation inherent in that process. Presumably they think it's a clash that Israel, with its political leverage in this country, can win. We wonder about that, but no matter. The real and necessary confrontation is is Israel proper, between those who sense the opportunity opened up by the Sadat initiative for a measure of imperfect but growing security beyond anything Israel can otherwise know, and those who don't.