Palestine Liberation Organization leader Yasser Arafat agreed in principle tonight to order his forces to lay down their arms and leave Beirut with him, Lebanese government sources said.

But the official PLO news agency Wafa reaffirmed the organization's previously-expressed determination to fight the Israeli troops who have encircled this capital, saying the Palestinians would "continue to confront the invasion."

The conflicting accounts left in confusion the status of negotiations over the PLO's future. The Palestinians had made clear earlier in the day that they feared an Israeli assault on their positions in West Beirut, and the report that Arafat had decided to yield might have been intended to forestall an attack.

There was no official confirmation of Arafat's decision, which the government sources said Arafat had made during a meeting with Prime Minister Shafiq Wazzan and Palestinian and Lebanese army officers. The group was reported still working out details of the PLO's departure, but the sources indicated that they did not expect the negotiations to take much longer.

Information about the reported accord was very sketchy, and it was not known if the Israelis or the United States were involved in the talks or would accept the terms. The United States has been mediating among Israel, the PLO and the Lebanese government in the crisis.

It was unclear what conditions, if any, Arafat had set in reportedly offering to give up PLO weapons and leave the country. The Palestinians, seeking to win a concession as a face-saving gesture, had demanded earlier that the Israeli forces withdraw several miles from the outskirts of Beirut.

It also was unclear where the PLO forces would go if they left Lebanon, their home since 1971. The Israeli Cabinet today demanded that all guerrillas in West Beirut surrender their arms to the Lebanese Army and leave for Syria.

The Palestinian news agency said an official PLO spokesman "reaffirmed that the decision of the Palestinian leadership since the beginning of the Israeli-U.S. invasion of Lebanon has been to remain steadfast and fight until victory." The dispatch ended with the slogan, "Victory or martyrdom."

Israeli aircraft dropped leaflets on the city warning civilians to take advantage of the current cease-fire, which began Friday evening, and flee. The Israeli Army has spent the past two weeks bringing in hundreds of tanks and heavy artillery pieces for the possible ground attack.

Between 5,000 and 6,000 Palestinian guerrillas are defending their refugee camps and strongholds in this beleaguered capital. Their leaders have been coming under mounting pressure from Lebanese politicians who want to avert a destructive Israeli onslaught on the predominantly Moslem western section of the city, where 500,000 Lebanese and Palestinians live.

Until this evening, Palestinian officials had great hope that Saudi Arabian influence in Washington would help avert the difficult decision that Arafat was said to have taken.

Arafat's reported decision came after Saudi Arabian leaders told Palestinian guerrillas that they were close to arranging a deal with the United States calling for a pullback by Israeli forces and a face-saving formula for the removal of guerrillas from Beirut, according to a high-ranking Palestinian official.

Details about the U.S.-Saudi talks were vague, but the source, who requested anonymity, said there was an implicit Palestinian agreement to accept virtual disarmament of their forces and exile of their leadership. He emphasized that the whole deal depended on simultaneous Israeli disengagement, saying, "Any disengagement is political--be it five miles or one meter--because it would mean that the battle of Beirut is over."

Stressing that vital U.S. and Saudi interests were at stake, the official said the United States had moderated its position since Alexander M. Haig Jr. resigned as secretary of state and now was pressing Israel to accept less than total Palestinian surrender.

Evidence of the changed U.S. mood, the official said, was the solidity of a cease-fire and the Saudi attitude--described as "very cool, confident and reassuring"--based on contacts with the White House and the Pentagon.

Speaking on the basis of six telephone calls Saturday between Saudi King Fahd and Arafat, the official said the monarch had "hinted that something had been worked out with the Americans."

The official said the Palestinians had been willing to negotiate their future status in Lebanon with the Lebanese government but not with the United States or with Israel.

Meanwhile, there was no precise information about the fate of proposals that American special envoy Philip C. Habib handed President Elias Sarkis yesterday for transmission to the PLO.

At midday PLO spokesman Mahmud Labadi said, "Some were accepted and some we, of course, refused." He provided no further details.

However, Saeb Salam, a former prime minister who has played a key role in negotiations between the Palestinians and Habib, said he feared "time is running out" on an "honorable solution" for the Palestinians.

Salam's pessimism fitted in with the mood of predominantly Moslem West Beirut, which was set on edge by the Israeli pamphlets just when its residents were getting used to the cease-fire in the war that today began its fourth week.

Indicative of the fear caused by the Israeli pamphlets dumped on Beirut were telephone calls to Habib from Salam and from Hasan Khaled, the grand mufti of Lebanon's Sunni Moslems.

Salam told reporters that he had informed Habib, safe in Israeli-occcupied territory on a hillside overlooking Beirut, "Leave aside politics. I'm telling you, not as a politician but as one of hundreds of thousands of residents, that I am horrified. People come to me, and all I can say is that I'm staying."

Meanwhile, the respected French-language newspaper L'Orient-Le Jour published a hospital-by-hospital list of casualties caused by the Israelis' air, artillery and naval gunfire pounding of West Beirut Friday before the cease-fire took effect.

With more bodies still to be dug out of the rubble, the toll stood tentatively at 209 dead and 153 wounded in Beirut. About 150 were killed and 200 wounded in the mountain fighting in Aley and Bhamdoun when the Israelis drove the Syrians and their allies out of those onetime summer resorts on the Beirut-to-Damascus highway.