The people of Israel are confronted with a soul-searching choice. Do they respond positively to the United States peace plan which holds out promise for ending the cruel cycle of wars that has beset the state of Israel ever since its founding? Or do they resist a compromise, pursue their present expansionist course, and virtually assure that they and their children will go on living indefinitely in an atmosphere of tension and hostility?
Put in the simplest terms, do they want peace - or land?
To the sorrow of Israel's supporters abroad, the Begin government gives every sign of seeking the latter. Its recent announcement that it has approved the building of another 10 Jewish settlements in the occupied West Bank is but the latest act of defiance in a long series of provocative actions. Coming as it does right after the Reagan initiative, it seems an especially scornful slap at the United States and its effort to rekindle the peace process. After all that has happened in recent years, there can scarcely be any doubt that Menachem Begin and his militant followers long ago made their choice: the choice of land over permanent peace.
Fortunately, Mr. Begin does not represent all of Israeli opinion. There are other forces at work which could persuade Israel that its long-term interest lies in negotiation and accommodation. The opposition Labor Party has long advocated restoring part of the West Bank to Jordan, and party leader Shimon Peres has reacted positively to the Reagan plan. Also, Israeli polls show that, now that the military threat of the PLO has been eliminated, a growing number of Israelis are willing to give up portions of the West Bank in return for peace. To be exact, 51.2 percent now favor a territorial compromise.
If the Arab leaders, notably Jordan, themselves courageously seize the moment and agree to negotiations on the basis of the US proposal, opinion in Israel could shift even more. Israelis might also be mindful that public attitudes in the United States are changing - not least of all among the Jewish-American community. In an interview with the New York Times, the head of the American Israel Public Affairs Committee, a major pro-Israeli lobbying organization, has openly described the Reagan initiative as having ''many constructive points'' and as ''well received by the American population.'' And, as the official himself points out, members of Congress also are likely to view it favorably.
If they are realistic, Israelis will have to ask themselves how long they can expect Americans and their lawmakers to give unquestioning backing to Israel when it becomes generally perceived that Israeli policy is oblivious to the US national interest - and to Israel's own interest. Secretary of State George Shultz has adopted a restrained posture of letting the ''possibility of peace'' act as the most effective pressure on Israel to negotiate. But it cannot be ruled out that the administration and the Congress will turn to the pressure of withholding US aid if all else fails.
Surely this is a time for Israelis to take a risk for peace. Guided by reason instead of emotion, they would realize how much the US plan concedes to them. It rules out an independent Palestinian state in the West Bank - something they have feared the most. It rules out the military danger, for, as Mr. Shultz has now amplified, an autonomous Palestinian West Bank linked with Jordan would have to be ''demilitarized.'' It also allows for an adjustment of Israel's frontiers.
If these concessions do not appeal, outsiders will ask, what do the people of Israel want? A continuation of Mr. Begin's policy of de facto annexation of the occupied territories with all the consequences that would have for further violence in the region? A policy that would transform Israel from an advanced, democratic state capable of acting as a force for progress in the Middle East into an expansionist mini-superpower keeping surrounding states in a constant state of belligerency?
Perhaps a people live with war or the fear of war so long they can no longer imagine life without it. But the world will hope and pray that the deepest longing of Israelis is not for more land, taken by force from others, but for that peace and reconciliation with their neighbors which alone can make them secure.