Israel's Parliament yesterday elected Yitzhak Navon as the nation's fifth president. Navon, an opposition Labor Party member and outspoken peace advocate who favors direct negotiations with the Palestinians, was unopposed.

Navon was picked from the ranks of the opposition party after it became clear that Prime Minister Menachem Begin's candidate, Yitzhak Chavet, could not carry an election. He will occupy an office with many ceremonial duties but no substantive political influence. As chief of state, he will occupy the modern Presidential Mansion and accept diplomats' credentials, but it is unlikely that he will be a significant factor in government policy.

Navon, the first Sephardic Jew and first native-born Israeli to assume the presidency, pledged to close the gap between the Sephardim - Israelis of Middle Eastern origin - and the Ashkenazim, or Jew of European extraction.

Navon also pledged to "mend relations" with Israel's Arab population of nearly 500,000.

He succeeds Ephraim Katzir on May 29 for the five-year term.

Navon, an author and playwright whose productions have achieved local acclaim, allied himself with the dovish wing of the Labor Party during his tenture as chairman of the Knesset's (Parliament's) most powerful committee. He favored negotiations with any Palestinian organization that recognized Israel at a time when the government opposed any such talks. Israel still opposes such a move.

Born in Jerusalem to a family rooted to the city for generations, Navon served as Prime Minister David Ben-Gurion's secretary for 11 years, and his alliance with the maverick father of Israel incurred the wrath of such Labor Party giants as former Prime Minister Golda Meir and Yitzhak Robin, both of whom opposed his candidacy for president in 1973.

In other Middle Eastern developments:

Israeli Defense Minister Ezer Weizman was juoted in a broadcast on the state-owned radio that Israelo forces will withdraw by May 5 to the six-mile "security belt" captured during the first phase of the invasion of southern Lebanon a month ago. The report quoted Weizman as saying the troops would wait on that line, running from the coast to the foothills of Mt. Hermon, until U.N. peacekeeping forces were in control of all areas south of the Litani River.

Israeli's Supreme Court turned down an appeal to reduce the prison sentence of Terre Fleener, a 23-year-old Texas woman serving five years for collecting information for Arab guerrillas. Fleener was accused of photographing public buildings and beaches and sending them to a guerrilla contact for what the court assumed would be the planning of a terrorist raid.