Prime Minister Menachem Begin met with U.S. envoys Philip C. Habib and Morris Draper today after publicly declaring his optimism that Israel can achieve an agreement with Lebanon that will "ensure the fruits" of the war in Lebanon.

Begin met with the two American diplomats for more than two hours late this afternoon amid continuing speculation that he will back down on his insistence that some of the negotiating sessions on a troop withdrawal from Lebanon be held in Jerusalem.

Optimism about the Lebanon negotiations was also fueled by Defense Minister Ariel Sharon, who attended the meeting in Begin's office and who earlier today spoke of a "breakthrough" in the deadlock.

Speaking to reporters while touring Israeli-occupied areas of Lebanon, Sharon said, "We are today very close to the commencement of political and security negotiations--direct ones--between Lebanon and Israel which will ultimately pave the way to peace with a second Arab state."

Uri Porat, Begin's chief spokesman, said following the meeting tonight that "substantive issues" surrounding the negotiations were discussed and that they would require a new decision by the Israeli Cabinet when it meets on Sunday.

Habib and Draper returned to the Middle East this week at the outset of a renewed American effort to break the deadlock over beginning negotiations for the withdrawal of Israeli, Syrian and Palestinian troops from Lebanon. The major roadblock to the negotiations appears to be Israeli insistence, set out in a Cabinet decision on Nov. 28, that the talks be held in Beirut and Jerusalem.

The two Americans were expected to propose measures to skirt the emotional Jerusalem issue. There has been speculation these would include initial "shuttle diplomacy" by the U.S. envoys between Beirut and Jerusalem and the holding of direct Israeli-Lebanese talks later in Europe or possibly Washington.

In Washington, U.S. sources said that extended shuttle diplomacy by Habib and Draper has been effectively ruled out by Israel, which insists on direct talks with Lebanon. The most likely solution, the sources added, is expected to involve Israeli-Lebanese talks in a West European city -- probably Rome.

Speaking to the 30th World Zionist Congress earlier today, Begin did not mention Jerusalem or U.S.-Israeli relations, which have deteriorated because of the Lebanon stalemate. He said Israel will do "everything" to reach an agreement with Lebanon.

The speech was Begin's first since the death Nov. 14 of his wife, Aliza.

In his speech, Begin made a strong appeal for continued Israeli control of the occupied West Bank and Gaza Strip and continued Jewish settlement of the territories -- an issue that has divided the almost 700 delegates to the Zionist congress as much as it divides Israel.

Yesterday, a majority of the delegates voted for a resolution proposed by supporters of the opposition Labor Party calling for a peace settlement based on a "territorial compromise" -- a euphemism for return of much of the West Bank to Arab control. Formal adoption of the resolution, however, was blocked by parliamentary maneuvering in an effort to reach a compromise.

Reflecting the resentment of low-income immigrants to Israel from North African and Middle Eastern countries, the delegates adopted a resolution calling on the Israeli government to divert funds from settlement activity to an internal slum renewal program in Israel.

Begin, seeking to avoid the embarrassment of having the World Zionist Congress adopt a position contrary to a key government policy, told the delegates that continued Jewish settlement of the West Bank was critical to Israel's security.

"The people of Israel are entitled to settle wherever they wish throughout the homeland," Begin said. "We are entitled to settle throughout Judea and Samaria the biblical names for the West Bank and the Gaza Strip."

"There are those who say it is possible to forfeit a right, at least partially, in order to achieve peace," he added. "This is no more than an illusion."

This was a response to the Labor Party's call for "territorial compromise" on the West Bank and to a speech to the congress yesterday by Labor Party leader Shimon Peres.

Peres warned the Zionist delegates that Israel will face "unprecedented dangers" if it succeeds in settling the West Bank but fails to attract more Jewish immigrants. Commission Corrects Report On New Sharon Testimony Washington Post Foreign Service

JERUSALEM, Dec. 16--Defense Minister Ariel Sharon will submit a written statement to the Israeli board of inquiry that is investigating the Beirut massacre and will also have his lawyers appear before the three-member panel in his behalf, a spokesman for the board said today.

The inquiry board said yesterday that Sharon had turned down an invitation to reappear before the panel and to otherwise present new evidence. The misleading announcement apparently stemmed from the fact that Sharon was the last of the nine Israeli officials who have been warned that they may be harmed by the investigation's conclusions to respond to the invitations.

Bezalel Gordon, the commission spokesman, said Sharon's full reply did not reach the inquiry board until near the deadline of midnight last night but that earlier last night excerpts from Sharon's letter were read over the telephone to inquiry board staff members by an aide to the defense minister. The excerpts were "incomplete," Gordon said.