Former Israeli Prime Minister Binyamin Netanyahu has won the leadership of the right-wing Likud party.
Netanyahu will face Ariel Sharon in a general election in March
Mr Netanyahu was declared the winner shortly after his main rival, Foreign Minister Silvan Shalom, conceded defeat in the poll of party members.
Mr Netanyahu took about 47% of the vote, with Mr Shalom polling about 32%.
Prime Minister Ariel Sharon, who is due to leave hospital on Tuesday after a stroke, left Likud last month. A general election will be held in March.
1949: Born in Tel Aviv
1967-73: Soldier and commando captain
1984: Ambassador to UN
1988: Enters Knesset and cabinet
1996: Becomes prime minister
1999: Loses election
2002-3: Foreign minister
2003-5: Finance minister
Mr Netanyahu, 56, opposed Mr Sharon's pull-out of Israeli settlers from the Gaza Strip earlier this year.
He quit his cabinet post as finance minister in protest at the move.
Addressing supporters at Likud headquarters in Tel Aviv, Mr Netanyahu first offered his best wishes to the prime minister, before vowing to lead Likud to victory in March.
"I came here tonight to tell you that as of now, the Likud is beginning the march back to reclaim the leadership of the country," he said.
Mr Shalom, who has pledged to stay in Likud and work with Mr Netanyahu, conceded defeat after initial poll results reflected exit polls predicting a win for Mr Netanyahu.
Hardline candidate Moshe Feiglin won an estimated 15% of the vote, with agriculture minister Israel Katz in fourth place with 6%.
The winning candidate needed to secure more than 40% of the vote to avoid the contest going into a second round.
Party officials put the turnout at about 40% of the 130,000 members who were entitled to cast ballots.
The rump of the Likud party left after Mr Sharon left to form a new party consists mainly of hardline right-wingers, says the BBC's Richard Galpin in Jerusalem.
Mr Netanyahu has staked out a very clear position, rejecting the handing back of any more occupied territory to the Palestinians unless it is first put to the Israeli people in a referendum.
Likud is currently in third place in opinion polls for the country's forthcoming general election, with Mr Sharon's newly created Kadima party leading the way.