The right-wing Likud party is divided over Sharon's planned pullout from Gaza, but the prime minister on Thursday told party members that he would run again in Israel's next parliamentary elections.
"I plan to continue to lead in the coming years ... . I have decided that in the wake of the situation, with the hopes and dangers, to run for prime minister in the next elections," Sharon, 76, said.
Sharon's party had split over his plan to remove all 21 Jewish settlements from Gaza and four from the 120 in the West Bank in 2005. Opponents say the plan would give Palestinian resistance fighters a "reward for terror".
The Israeli leader has faced down opposition over the plan by Finance Minister Benjamin Netanyahu, a former prime minister who has enjoyed support from Likud rebels and is widely seen as Sharon's likely challenger in the party's primaries.
Netanyahu has not commented on whether he would run to topple Sharon from the Likud's top seat.