Sharon loses crucial party vote

The meeting was a tempestuous affair

Israeli Prime Minister Ariel Sharon has lost a key vote in the central committee of his Likud party over whether to allow a future Palestinian state.

The vote, a show of hands in which only a few delegates supported the prime minister, is seen as a major defeat for Mr Sharon and calls into question how strong his support in his party is.

This must be clear - there will not be a Palestinian state west of the Jordan river because that would be a deadly threat to Israel

Binyamin Netanyahu

Former Prime Minister Benjamin Netanyahu, who has said he would challenge Mr Sharon's leadership of Likud, had called for a vote rejecting the concept of an independent Palestinian state arising from peace talks.

Mr Sharon had urged party members not to vote on the resolution saying it would be against Israel's interests to rule out any future settlement which included the creation of a Palestinian state.

But in a secret ballot party members voted by a margin of 669 to 465 for the vote to be allowed to go ahead.

After the stinging defeat Mr Sharon made a brief statement saying he would honour the decisions of his party's central committee.

Netanyahu is stalking Sharon for the Likud leadership

But 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".

Speaking afterwards Mr Netanyahu said the vote sent out a clear message.

"We must root out terror and then move towards peace with the Palestinians governing themselves. But we must not give them powers of sovereignty that could allow them to destroy us," he said.

Mr Netanyahu denied that the party's defiance of Mr Sharon signalled disunity in the party.

Any decision taken today on the final agreement is dangerous to the state of Israel and will only intensify the pressures on us

Ariel Sharon

"The prime minister is greatly respected here. This is a united party and Mr Sharon and I both belong to the same party," he said.

BBC correspondent Michael Voss in Jerusalem says the vote against Palestinian statehood is deeply embarrassing to Mr Sharon who has publicly supported the creation of a Palestinian state on land currently occupied by Israel.

Both right-wingers were booed and heckled by the other's supporters during their addresses to the committee.

Rowdy meeting

In his 20-minute speech, Mr Sharon said peace could not be achieved in the Middle East without an end to terrorist violence and a huge reform of the Palestinian Authority.

"First, a complete halt to the terror, the violence and incitement. Two, the Palestinian Authority must carry out internal reforms in every way - on security, the economy, the legal system and within society," Mr Sharon demanded.

"Only afterward, when we see how the Palestinians are building their society and self-government, after we are convinced that their faces are turned toward peace, then we can move toward discussions on the exact nature of our relations," he added.

"Any decision taken today on the final agreement is dangerous to the state of Israel and will only intensify the pressures on us," Mr Sharon said.

Rowdy reception

At one point during Mr Sharon's speech, the challenger was obliged to ask his supporters to respect the prime minister and let him be heard.

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Mr Netanyahu, Mr Sharon's main rival for the leadership of Likud, is adamant that no Palestinian state must be allowed to form.

"This must be clear - there will not be a Palestinian state west of the Jordan river because that would be a deadly threat to Israel," he said.

Meanwhile Israel has sent home army reservists called up after the cabinet authorised military action in the Gaza Strip in retaliation for a Palestinian suicide bombing.

Defence Minister Binyamin Ben-Eliezer said the decision should not be interpreted as a surrender to "terrorism" and that Israel reserved the right to respond when it wanted.