Lawmakers voted 60-52 against a motion filed by the main opposition Labour party on Monday against the government's economic and social policies.
Labour needed 61 "yes" votes to topple Sharon's troubled right-wing coalition in the 120-seat Knesset.
Sharon also beat back a second no-confidence motion sponsored by Israeli Arab parties among others, but the breakdown of votes was not immediately given.
As Sharon vowed to put his plan to a parliamentary vote earlier, ultra-nationalists heckled him loudly.
In a televised speech, the premier made clear he would not be deterred from pushing ahead with his plan to "disengage" from conflict with the Palestinians.
The plan envisages uprooting all 21 Jewish settlements in Gaza and four of 120 West Bank settlements but also annexing parts of the West Bank next year.
Settlements in the occupied Palestinian territories are deemed illegal by international law.
"I intend to bring it to a vote in the Knesset on 25 October," Sharon said, setting a timetable that could help pave the way for Israel's first removal of settlements built on occupied land since it returned the Sinai to Egypt in 1982.
Sharon's plan could spur a pro-settler coalition partner to carry out its threat to bolt, further weakening his government and possibly forcing him to call early elections.
Despite that, commentators say the crucial "disengagement" bill could still pass with the help of the Labour opposition.
Labour leader Shimon Peres told lawmakers his party would provide a "safety net" to ensure parliamentary approval.
Polls show that most Israelis favour abandoning Gaza's hard-to-defend settlements.
Most Israelis are in favour of
abandoning the Gaza settlements
Sharon said that following a parliamentary vote on the principles of "disengagement" later this month he would present legislation detailing compensation for evacuated Jewish settlers in the first week of November.
He also reaffirmed his commitment to a US-backed "road map", which has stalled, despite a senior aide's published comments last week effectively dismissing it.
No peace talks
But in a bid to assuage far-right resentment, Sharon - once considered the settlers' champion but now reviled by them as a traitor - said: "I feel their pain, which is real and deep."
Sharon, under low-key US pressure to end a 12-day-old military offensive in Gaza which has killed more than 100 Palestinians, overruled army chief Moshe Yaalon's request to curtail the military campaign, security sources said.
Sharon also ruled out any prospect of an immediate resumption in negotiations with the Palestinian leadership, which have been frozen for more than a year.
Uraiqat said Sharon must 'follow
his words with action'
"As long as the Palestinians distance themselves from their
responsibilities ... there will be no advance in political
negotiations," he said.
"Negotiations will be renewed when the
Palestinian meet their previous commitments."
Negotiations Minister Saib Uraiqat urged Sharon "to follow his
words with action".
"What Israel is doing on the ground is contrary to the road map and is an act of sabotage," he added.
Israel's settler movement unveiled plans on Monday for a massive campaign to force Sharon to submit his plan to a national referendum.
Under the banner "Sharon is tearing apart the nation", the settlers' main organisation, the Yesha Council, "is demanding that the prime minister bring his Gaza and northern Samaria - northern West Bank - disengagement proposal to a national referendum or call for early elections", a statement said.
The council intends to plaster posters in northern Israeli towns that read "Qassams are on their way", in reference to the crude rockets manufactured by Hamas and named after the group's armed wing - the Izz al-din al-Qassam Brigades.
Qassams have only been fired from the Gaza Strip so far at southern Israeli communities.