Most political observers in Israel predict the internal Likud crisis, originally fuelled by the Israeli withdrawal from the Gaza Strip, will sooner rather than later bring about the collapse of the government.
 
On Monday, Likud hardliners voted against the government during a Knesset vote.
 
The rebels led by members such as the right-wing Uzi Landau, have also threatened to vote against a crucial budget vote later this month if Sharon does not heed their demands to seize more Arab-owned land in and around East Jerusalem for further Jewish settlement expansion.
 
Landau and his colleagues formed a common front with Jewish settler leaders in resisting and trying to foil the withdrawal from Gaza.
 
However, since the withdrawal in August, the rebels never forgave Sharon for what they viewed as a "national treachery".
 
Safest scenario

The Israeli newspaper Ha'aretz on Wednesday predicted that Sharon might decide to form his own political party if a Likud split becomes a reality.
 

Israel's pullout from Gaza may
have spurred internal dissent

Sharon has denied reports that he was contemplating leaving the Likud.
 
However, he earlier lambasted his critics, saying that their behaviour was making it difficult for him to continue leading the nation.
 
Going for early elections is probably the safest scenario for Sharon if the present divisions within the Likud persist - as is likely to happen.
 
Without a strong backing from his party, Sharon would not be able to remain prime minister for long, since he would be relying heavily on the Labour party and indirect support from the Arab parties and the centre-left Yahad.

This is something that would not be well-received by the right-wing Israeli voters who brought Sharon to power twice in the past five years.

Power
 
On Wednesday, Israel's The Jerusalem Post quoted unnamed Sharon advisers as saying that the Israeli premier "wants to advance the elections so he can return to power and decide where Israel's final borders are going to be".
 

"There is no doubt that Sharon wants to draw the borders"

Unnamed Sharon adviser

"There is no doubt that Sharon wants to draw the borders," one adviser was quoted as saying.

"Sharon thinks that only he can do it because he knows the land and this is his historic mission. He looks around and sees no other potential Israeli leader who can do it. It will be difficult, but it's what the nation wants and it's what the world wants."
 
Phased collapse
 
According to Yossi Alpher, a prominent Israeli political commentator, the collapse of the present Likud-Labour coalition government is a foregone conclusion.
 
"We are already witnessing the stage-by-stage collapse of this government, and the only way out is early general elections. It would take a miracle to keep the government intact."

The Knesset holds a leadership
election on Wednesday

Alpher said it was unlikely that Sharon would resort to forming his own party, noting that such a party would receive no more than 10 Knesset seats out of the 120-seats making up the Israeli parliament.
 
Asked what impact early elections in Israel would have on the peace process, Alpher said elections were likely to freeze all serious political initiatives between Israel and the Palestinians for at least one year.
 
"First of all, there is no peace process. But the elections would postpone any significant initiatives such as the dismantling of illegal outposts in the West Bank."
 
The Israeli commentator said the Palestinian legislative elections, with the likely possibility of a good performance by Hamas, could give Sharon a pretext to refuse to negotiate the implementation of the American-backed "road map" with the Palestinian Authority.
 
"He would tell the world that Israel couldn't negotiate with a government that has within it elements that don't recognise Israel and practice terror."
 
However, Alpher recognised that Sharon did not really believe in a negotiated settlement with the Palestinians and that he was preferring unilateral arrangements imposed on the Palestinians.

Leadership vote
 
Meanwhile, Labour party registered members cast their ballots on Wednesday to elect a party leader.
 

Opinion polls predict Peres
will win by a narrow margin

Contending the vote are the incumbent interim Labour party leader Shimon Peres and Amir Peretz, head of the once-powerful Federation of Labour Unions known as Histadrut.
 
Opinion polls have predicted that Peres will win by a narrow margin over Peretz, a descendant of an immigrant Jewish family from North Africa.
 
Peres, 79, favours a "continued partnership" with the Likud under Sharon's leadership on the grounds that a Labour party presence in government would serve to restrain Sharon and help keep the political process alive.
 
On the other hand, Peretz believes it is futile for Labour to join a Likud-led government, arguing that this makes the party lose status and stature among Israelis as it is perceived as compromising its values and ideals for a short-lived political expediency.