West Germany said it will decide next week whether to extradite Lebanese hijacking suspect Mohammed Ali Hamadi, who is wanted by the United States, or try him in a West German court. Informed sources said that Hamadi, arrested at Frankfurt airport last January after police found explosive materials in his baggage, will probably face trial in West Germany. He is believed to have participated in the June, 1983, hijacking of a TWA airliner to Beirut. A U.S. Navy diver was killed by the hijackers. Officials confirmed that American crew members aboard the TWA flight identified Hamadi as a hijacker in a West German line-up Monday.