MOSCOW, AUG. 5 -- The legislature of Soviet Armenia will begin discussions Monday on whether to call for the eventual establishment of an Armenian state independent of Moscow.

The debate follows election by the legislature Saturday night of independence activist Levon Ter-Petrossian as president of Armenia, which has long smoldered with militant nationalist sentiment.

Ter-Petrossian, a scholar of ancient Armenian history who was jailed for six months last year for his role in organizing nationalist demonstrations, supports a declaration of negotiated independence from Moscow, much like those adopted earlier this year in Soviet Latvia and Estonia.

He defeated Armenian Communist Party leader Vladimir Movsisian for the presidency on the fourth ballot, 140 to 76. When the results were announced, thousands of people outside the building broke into cheers and chants of "Levon! Levon!"

Ter-Petrossian, 45, heads the All-Armenia National Movement, an independence group that controls 45 percent of the seats in the legislature, but he also received a substantial number of votes from Communists -- who also control about 45 percent -- and independents, who hold the rest of the seats.

Addressing the legislature, Ter-Petrossian charged that the Armenian Communist Party had often "sold out" the republic's interests to satisfy the Kremlin. He also said Armenia should work out its independence from Moscow "by legal means" and negotiation instead of confrontation. He said Armenia, which was last an independent state from 1918 to 1920, should eventually become a memer of the United Nations and have embassies abroad.

Legislators are already circulating drafts of an independence declaration, but sources in Yerevan, the Armenian capital, said none is as unequivocal as the one passed in March by Soviet Lithuania. When Moscow halted delivery of fuel and raw materials to Lithuania until it agreed in June to suspend its declaration and negotiate independence, the two other Baltic republics, Estonia and Latvia, as well as Soviet Georgia, passed independence resolutions that were less confrontational.

"I think everyone here learned the lessons of the Lithuanian experience," Raffi Hovannisian, an Armenian-American who is a leader of the Armenian Assembly lobbying group in Washington, said by telephone from Yerevan. "The idea is to avoid economic or military sanctions from Moscow and to win independence by means of negotiation."

Rafael Popoyan, a journalist and member of the Armenian legislature, said that instead of declaring independence the lawmakers may call for national sovereignty within the Soviet Union. Last December, the legislature declared that Armenian laws would take precedence over those of the Soviet Union.

In the past, many Armenians argued that while they felt exploited by Moscow, they could not afford independence for fear of leaving themselves with little defense against unfriendly peoples around them, and none was unaware of the 1.5 million Armenians who died -- allegedly massacred by the Turks -- in upheavals during and immediately after the First World War. But Hovannisian and others in Yerevan said those fears have subsided significantly in the past two years.

Turkey has disputed Armenian accounts of the early-century death toll, saying thousands died of famine and as a result of fighting in World War I and a civil war that followed.

Armenian nationalism grew dramatically in February 1988, with the rise of a mass movement demanding control of Nagorno-Karabakh, a predominantly Armenian-populated enclave within neighboring Soviet Azerbaijan. The conflict between the two Soviet republics has since resulted in hundreds of deaths and, last January, a virtual civil war.

Ter-Petrossian faces a critical decision this week about how to respond to Soviet President Mikhail Gorbachev's ultimatum that members of vigilante groups in strife-torn republics hand over their arms by Thursday or face Soviet militia and army units. In Armenia, where thousands belong to such groups, the legislature voted last week to reject the order.

Tensions reached new heights this week when members of Armenian paramilitary groups stole 100 flame-throwers from an army weapons depot. Popoyan said the Armenian legislature demanded that the weapons be returned, and they were -- after announcement of Ter-Petrossian's election.

Ter-Petrossian has said that the Armenian government should settle the arms issue and maintain jurisdiction over the paramilitary groups.

Gorbachev has called for a new treaty of union that would give the 15 Soviet republics the right to sovereignty and leave Moscow responsible mainly for foreign and military policy and the national economy.