Prime Minister Ariel Sharon suffered a major political setback Sunday night when members of the Likud Party Central Committee voted overwhelmingly against the eventual creation of a Palestinian state. Party members at the stormy session defeated Sharon's proposal to postpone the vote, and instead backed the hard-line position of former Prime Minister Binyamin Netanyahu and his open challenge for party leadership.

In a secret ballot, Likud members rejected Sharon's proposal by a margin of 669 (59%) to 465 votes (41%). Using his authority as head of the party, Sharon's alternative proposal suggested wording stating that the central committee was "unified in its support of the government led by the Likud, the ministers of the Likud, and a Likud prime minister, and their efforts to fight terrorism and continue diplomatic activity toward achieving a lasting peace."

"Any decision taken today on the final [status] agreement is dangerous to the state of Israel and will only intensify the pressures on us," Sharon told the crowd, promising to bring future diplomatic agreements to the central committee for approval.

The Likud Party's charter already includes a clause stating its opposition to a Palestinian state west of the Jordan River, but the resolution was brought to the central committee session by Netanyahu supporters came after Sharon twice stated his acceptance of an eventual Palestinian state at the end of a long-term diplomatic process.

After the results of the secret ballot were announced, Sharon said he would honor the central committee's non-binding decision. But he added, "I will continue to lead the State of Israel and the people of Israel according to the same ideas that led me always - security for the state of Israel and its citizens and our desire for real peace." Sharon then left the hall before the vote rejecting a Palestinian state was held.

"Self-rule, yes; Palestinian state, no," Netanyahu declared in his speech, earlier in the evening. "The biggest mistake we can make is rewarding terror by giving it a state of its own." Netanyahu warned that the Palestinians would use their state as a base for terror attacks against Israel, would make alliances with Israel's enemies and would harm Israel's air and water rights.

But Netanyahu's strongest words came in criticism of Sharon's actions as prime minister. He charged that Operation Defensive Shield was "incomplete" and that the government should have moved to exile Palestinian Authority Chairman Yasser Arafat. "We refuse to accept the fact that the military option is not viable [in combating terrorism]. It is the only option," he said.

"I want to make it very clear that I never, ever supported the establishment of a Palestinian state," Netanyahu said. "Without anyone's having approved it, by stating statements which were not called for, the support for a Palestinian state, policy of [Opposition leader Yossi] Sarid and [Foreign Affairs Minister Shimon] Peres, has apparently become official government policy."

Netanyahu's speech was frequently interrupted by the jeers of Sharon's supporters, who had apparently been stationed in strategic places in the auditorium. Netanyahu appeared uncomfortable with the heckling, and he sweated profusely. "The central committee members I recognize are quiet," he muttered while trying to quiet down the crowd. "There are some suspiciously young central committee members here," suggesting that Sharon had filled the audience with young party activists.

Sharon never mentioned Netanyahu by name in his speech, but reminded the crowd that the party's former prime minister shook hands with Arafat during negotiations with the Palestinians. "I, at least, never shook hands with him and didn't give him the keys to any of our land," Sharon said, in reference to the Hebron agreement and Wye Plantation talks in which Netanyahu participated.

"There are those who give advice, and those who act," Sharon said. "Terror cannot be defeated in lectures or with slogans. We have heard a lot of these. Now is the time to act. Operation Defensive Shield is an example of this action."

Sharon also slammed Netanyahu for his criticism of a planned regional peace conference, similar to the Madrid talks in 1991. "As I recall, [former prime minister] Yitzhak Shamir agreed to the Madrid conference and sent his deputy foreign minister," Sharon said, in another reference to Netanyahu.

Sharon and Netanyahu both won, and both lost
MK Eli Cohen, who initiated the resolution rejecting a Palestinian state, said that Sharon had destroyed himself politically by his announcement that he would let his conscience, and not the central committee decision, guide his future actions. "The central committee won't forget that Sharon treated it so disrespectfully," one party member said.

MK Naomi Blumenthal said party members felt uncomfortable with the head-to-head clash between Sharon and Netanyahu. "People said, 'Why did they drag us into this situation, why did we have to make this choice that we didn't want to make?' It was an event that we didn't want to have happen," she told Army Radio.

Environment Minister Tzachi Hanegbi, who chaired the central committee session, said it was right for the Likud to "have its say… The prime minister must view himself, first of all, as the emissary of a movement, and he must be sensitive to what disturbs, frustrates, and pains his comrades, those who sent him," Hanegbi told Israel Radio.

Yediot Aharonot commentator Nahum Barnea wrote today that both Sharon and Netanyahu won, and both lost, at the Likud gathering. "Netanyahu won because Likud members, overwhelmingly, voted against the Prime Minister's proposal, slapping Sharon and his position in the face… He lost because Sharon pushed him to the right, further than the opinions he states in closed sessions. So far to the right that Sharon has become Chirac to Netanyahu's Le Pen.

"Sharon won because he proved to the world, and to Israeli public opinion, that he passed his first test of leadership - he was willing to pay a political price to protect diplomatic assets… But, he still lost. Sharon was beaten in the ballot and was humiliated on the stage."

Media analysts commented that Sharon, whose central committee appearance and proposal were orchestrated by his son, Omri, after compromise efforts between the rival camps failed, gambled with his proposal calling for support for his government and a postponement of the resolution against a Palestinian state, and came up empty handed.

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