Arik Sharon, hero of the bloody 1973 war with Egypt, is convinced that Israel's voters are moving toward full acceptance of Prime Minister Menachem Begin's militant settlements policy on the West Bank, a key element in the national security issue that underlies the bitter Israeli political campaign.

If he is right, Begin will continue as prime minister after the June 30 election and set the stage for new confrontations with the United States. Begin's aggressive settlements policy is anathema to Arab states now being courted by the United States for help in halting Soviet aggression in the Persian Gulf region. Thus, it undercuts President Reagan's policy with the Arab states. Many politicans here think the two policies are on a collision course.

To reinforce his conviction, retired Gen. Sharon has developed a unique campaign plan. By election day, he told us, some 400,000 voters -- at least one-quarter of the expected vote -- will have taken the "Sharon trail" from Israel proper to view the new settlements across the green line that separated Israel from Jordan before the 1967 war. Voters ride in state-subsidized buses.

"When they see what we have done," Sharon told us, "they understand there is no other way. I campaign not by kissing babies or taking flowers but by showing the settlements."

Planting Jewish settlements on the West Bank has been the great passion of Begin's first four years as Israel's leader. In his speeches. Begin, who is dominating all aspects of this campaign, likes to recall how he bested Jimmy Carter on the settlements issue. At a rally last week, he told with relish how Carter tried and failed to stop the settlements.

Temporarily freed from American pressure while Reagan develops his Middle East policy, Begin is now rushing to complete housing, roads, electrical lines, water mains and other comforts, and provide the generous financial subsidies needed to entice Israelis into the new settlements. His partner is Sharon, a serious man of large bulk who is perhaps the ablest and surely the most successful member of Begin's Cabinet. Poring over maps that depict Arab towns surrounded and hedged in by Jewish settlements, Sharon told us his polls showed two-thirds of Israel's voters now support Begin's plan -- "up 17 percentage points."

But the nasty question left unanswered by Begin and Sharon, and largely ignored in the campaign debate because it is so lethal, is this: how can autonomy, much less self-determination, ever work for 1,300,000 Arabs in the West Bank and Gaza if Israeli Jews populate their land?

There is a wide gap between Begin's policy of the Labor Party headed by Shimon Peres. It makes a contradiction as great as that between Begin's settlements policy and Reagan's strategy to enlist anti-Soviet help from Arab states that insist on self-determination for Palestinian Arabs.

Peres and his high command warn that if populated parts of the West Bank are not returned to Jordan under the elusive "Jordan option" plan that Peres is pushing, the Palestinians eventually will have to be offered Israeli citizenship or Palestine will be converted into a garrison state. But if the Palestinian Arabs ever do get the vote here, they will soon threaten the Jewish state with an Arab majority. Begin opposes any and all "Jordan options."

Old-line Labor leader Abba Eban, slated for foreign minister if Peres wins, told us: "Under Begin's settlements plan, we will either have to give the vote to the Arabs and we become a Jewish Lebanon [where the former Christian majority has been submerged by the faster-growing Moslem population], or we don't give them the vote and we are another South Africa."

Because security is always the underlying issue here and because the settlements question is a key to future security, Begin's policy should be the hottest debating point in the campaign.

In fact, however, Peres is loath to press a hard case against Begin's policy because to do so would mean running headlong into the pro-settlements militancy fired up by four years of Begin-Sharon success in planting new settlements.

This reluctance tends to reinforce the Begin-Sharon policy, creating conditions for a future clash with the United States if Reagan pursues his wider U.S.-Arab coalition against the Soviets.

Beyond that, Labor's failure to place the settlements issue front and center in the campaign illustrates the tragic dilemma of Israel unable or unwilling to come to grips with the central concern of its future security.