Israel's Prime Minister Menachem Begin said yesterday he is willing to spend "many days" trying to reach a Middle East peace agreement at the upcoming Camp David summit but that Israel will not present proposals that include "foreign sovereignty" for the occupied West Bank and Gaza Strip.

Begin also said that Israel's Cabinet had approved an 11-member summit delegation that includes Defense Minister Ezer Weizman but not Deputy Prime Minister Yigal Yadin, whose presence U.S. officials had hoped would exert a moderating influence on Israel's negotiating stance.

Following a four-hour meeting with Cabinet ministers, Begin said the Israeli delegation will submit proposals that essentially comprise the peace plan offered eight months ago during Egyptian President Anwar Sadat's visit to Jerusalem.

"This is our peace plan as it stands. It is a very good plan . . . This is the plan we are going to bring," Begin told reporters upon emerging from the Cabinet session.

When asked what new options the government had developed to end the negotiations impasse, Begin said, "We don't have to have new options. This peace plan is the basis for negotiations, as we've said time and time again."

Foreign Ministry sources said before yesterday's Cabinet meeting, however, that some changes have been made in Israel's planned strategy at Camp David that could make the Israeli position more flexible than previously.

The basic peace plan, which Egypt has sharply criticized, provides a five-year period of limited self-rule for Palestinian Arabs in the occupied territories, while Israel would maintain a military presence and Jewish settlements in the areas.

When asked if the Cabinet's instructions to the Camp David delegation include the possibility of foreign sovereignty for the West Bank and Gaza, Begin replied, "No." He said that when he issue of sovereignty is raised, "we shall discuss our plan, which is Israeli sovereignty."

Begin's remarks seemed, in tone at least, to dampen modest expectations raised earlier this month when he spoke optimistically of a "permanent partial peace" with Egypt that would mark the beginning of normal relations between the two countries, including trade, tourism, open borders and an end to the state of war.

The Cabinet yesterday issued a terse and vaguely worded communique that simply said the delegation would seek at Camp David a peace agreement and a continuation of negotiations beyond the summit meeting.

The changes described earlier by Foreign Ministry sources include participation of Palestinian "residents" of the occupied territories in negotiations during the five-day autonomy plan and an Isreali willingness to discuss changes in the limited self-rule plan.

Other modifications, the sources said, include Begin's willingness to discuss withdrawal, even though Israel still maintains that the autonomy plan answers U.N. resolution 242, which calls for withdrawal from occupied territories. The sources also cited as evidence of new flexibility Begin's willingness to sign a "partial permanent" peace agreement, as opposed to a comprehensive agreement, which Israel has always advocated.

Cabinet Secretary Aryeh Naor would not say after the session whether the term "agreement" used in the communique refers to the "permanent partial peace" recently advocated by Begin.

Naor also referred back to Israel's autonomy plan, for the West Bank and Gaza Strip saying, "The Israeli peace plan still hasn't been given serious discussion in a face-to-face discussion . . . We've come to the stage where Egypt has presented a plan. Now it's time for discussion."

Egypt's six-point peace plan, which has been rejected by Israel, provides for Israeli withdrawal from the territories, with control of the West Bank going to Jordan and control of Gaza going to Egypt. The United Nations would supervise the withdrawal and restoration of Arab authority.

Begin said Israel is willing to discuss border adjustments for the West Bank and Gaza, but he noted that Sadat has rejected that notion. Begin added, "Our plan is the best basis for negotiating conclusions."

The Cabinet also approved the composition of the Israeli delegation to Camp David. Besides Begin and Weizman it will include Foreign Minister Moshe Dayan; Supreme Court justice-designate Aharon Barak; Israeli Ambassador to the United States Simcha Dinitz; Avraham Tamir, head of the army's planning branch; Foreign Ministry adviser Meir Rosenne, and ministerial advisers and aides.

Begin, who had sought Yadin's appointment to the delegation, said that on Saturday night the deputy prime minister asked that he be left behind to serve as acting prime minister and acting defense minister.

The decision to omit Yadin - who earlier this month lost a power struggle that led to the breakup of the Democratic Movement for Change party - averted a Likud coalition crisis.

The National Religious Party on Saturday said that if Yadin, who formed the new Democratic Movement party, went to Camp David, than the Religious Party's Minister of Interior Joself Burg should also go, or the party might withdraw from the government.