Mr Sharon had called a news conference to rebut allegations of corruption - but the election committee decided he was engaged in unlawful election propaganda and ordered the broadcast be cut.
Both the ruling Likud Party and the opposition Labour Party demanded the meeting of the Central Election Committee (CEC).
The prime minister - who is standing for re-election on 28 January - has seen his popularity fall sharply after the allegations appeared in the press this week.
Parties' demands
Earlier this week, the liberal Israeli daily Ha'aretz revealed that the attorney general was investigating a $1.5m loan the Sharon family received from a friend based in South Africa.
Mr Sharon began his defence on television by accusing the Labour Party of a smear campaign designed to topple the government.
Ten minutes into his speech, the CEC chairman, Judge Mishael Cheshin, ordered that Mr Sharon be taken off air.
Mr Sharon had just started to address the specific allegations against him.
The Likud Party was expected to argue before the CEC that Mr Sharon was prevented from defending himself in the face of a very damaging scandal.
For its part, Labour wants equal time to rebut the charges of corruption which Mr Sharon launched against their leader Amram Mitzna.
The BBC's Barbara Plett in Jerusalem says that it is difficult to see that any action of the CEC would improve Mr Sharon's position.
Attack on Labour
Israeli broadcasting law forbids "election propaganda" from being aired except in special slots for a month before elections.
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I have nothing to hide
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Ariel Sharon
In the speech he had prepared for Thursday, Mr Sharon said there was nothing improper about the loan in question, although he admitted that he needed the money to repay illegal contributions from his 1999 party leadership campaign.
"More than a year ago, the state comptroller discovered that contributions had illegally been made and informed me of this. I was amazed by these findings," he said.
"I... spoke to my sons. I told them on my own initiative that all the money must be immediately returned to the donors without any delay," he added.
"I have nothing to hide," Mr Sharon said, adding that everything had been done "legally and properly".
He accused the Labour Party of seeking to blacken Likud and his own family by "inventing lies and inflating gossip".
Mr Sharon said Labour's behaviour at such a critical time was "criminal" and "irresponsible".