Jerusalem — When Israeli President Yitzhak Navon meets with President Reagan on Wednesday - one month before Prime Minister Menachem Begin comes to call - it will be much more than a ceremonial visit.
The meeting will be watched with keen interest by both US and Israeli politicians.
The popular Mr. Navon, a down-to-earth politician who speaks seven languages fluently, is widely regarded in Israel as the only man who can rescue the opposition Labor Party from internal morass and almost certain future defeat at the hands of the governing Likud coalition.
US officials, frustrated at firm Israeli opposition to the Reagan peace initiative - whose concepts are generally acceptable to the Labor Party - make no secret of their eagerness to size up Mr. Navon. They are interested in feeling out whether he will pass up a chance at a second presidential term - his first expires in May - to head the Labor Party list.
Mr. Navon, who has a down-to-earth manner and a kindly smile, has made his ceremonial post into a base - some say it is political - from which to travel all over Israel, from poor Jewish development towns to Arab villages. He has called for healing the breach between Israelis of European and Oriental backgrounds, between rich and poor, and between Arab and Jew. He received rave reviews in a 1980 state visit to Egypt when he spoke to political leaders and people on the street in fluent Arabic.
The widespread affection and public attention he has earned surpassed that garnered in his pre-presidential career as longtime political secretary to the legendary Labor Party prime minister, David Ben-Gurion, and as a senior Labor Party parliamentarian from 1965 to 1978. He was elected President by the Israeli Parliament in 1978.
Although polls continue to show Labor Party strength declining - a Pori Institute poll taken in December shows 57.6 percent of those polled feel Labor is not now suited to return to power - Mr. Navon's popularity as a potential premier has continued to rise. Some polls show him ahead of all other Labor and Likud leaders, except Prime Minister Begin.
The key to the intense interest in Mr. Navon is his origin. Descended from Moroccan immigrants on his mother's side, and a product on his father's side of an illustrious Jerusalem family that arrived 300 years ago from Turkey, he ranks as a ''Sephardi'' Jew.
This is the not-quite-accurate term used to describe Jews who have come from Middle Eastern countries and now form the majority in Israel and the dominant political force here. Resentful of the Labor Party for long excluding them from power in favor of Jews of European origins, Sephardis - especially those from North African countries - have adopted Menachem Begin as their hero.
Some Laborites say Mr. Navon is the only man who can bridge this gap. Jerusalem Post editor Ari Rath wrote recently, ''Given his tremendous popularity , Navon would be the most suitable person to heal the rift which at present separates the labor movement from a large segment of Israel's society.''