The president of Israel, Yitzhak Navon, announced today he will formally ask Prime Minister Menachem Begin to form a government on the basis of the June 30 election results, indicating that Begin has reached an agreement with smaller parties in his effort to gain a majority in the parliament.

After consulting with leaders of the opposition Labor Party and the minor parties that elected members to the Knesset (parliament), Navon said he would meet Wednesday with Begin and ask him to form a coalition government around the Likud bloc, which won 48 seats in the 120-member parliament.

Under Israeli law, Begin has 21 days to form a government, after which he may be given a three-week extension. However, Begin said he wants to announce his coalition as quickly as possible, and sources in his office said the prime minister plans to complete the task in a week to 10 days. The parliament is scheduled to open Monday.

After Begin threatened yesterday to call another election if he failed to form a coalition within three weeks, all potential coalition partners dropped or moderated their demands for concessions in return for joining the government.

Officials of the National Religious Party, which will hold six seats in the Knesset, were assured of two Cabinet portfolios, most likely the interior and religious affairs ministries. Party leaders said they saw no obstacle to joining the coalition.

Tami, a breakaway group from the National Religious Party headed by Religious Affairs Minister Aharon Abu-Hatzeira, is expected to settle for one portfolio. Abu-Hatzeira had demanded two.

The ultraorthodox Agudat Yisrael Party, which did not request any Cabinet seats, apparently will drop its demand for a change in Israel's Law of Return requiring that conversion of new immigrants be under orthodox law.

Leaders of the reform and conservative Judaism movements said in a press conference today that they were "gratified" with the Agudat's decision, and would continue their campaign to limit the influence of orthodoxy on the government.

While only a handful of the 20,000 immigrants to Israel each year are reform or conservative converts, the "who is a Jew?" is an explosive issue in the United States, where only about 500,000 of the 6 million Jews are orthodox.

The Law of Return amendment is raised in every Israeli election as a demand by orthodox parties that are invited to join coalition governments. But it has always been dropped.