Binyamin Netanyahu today unleashed a volley of verbal barbs against Ariel Sharon as he announced a widely-predicted challenge to depose the Israeli Prime Minister as leader of the Likud Party.

Mr Netanyahu told a news conference in Tel Aviv that Mr Sharon's policy of unilateral disengagement from Gaza had trampled on the party's principles.

Mindful of next year's critical elections, the Mr Netanyahu made no secret of his intention to capitalise on disaffection within the party's rank and file: "The Likud needs a leader who can unite the ranks and take it to victory," he said.

The rift between Israel's two heavyweights became a bitter public schism this month when Mr Netanyahu resigned as Finance Minister in protest over the withdrawal from the occupied territories.

"Sharon gave and gave and gave some more. The Palestinians got more and more and more. What did we get in return? Nothing," he said today.

"He [Sharon] abandoned the principles of the Likud. He chose a different path, the path of the Left. We have to restore to the Likud and the state the principles that Sharon trampled on."

Voicing the fears of the majority hardline of Likud party members, he added: "The Gaza Strip is turning into a base for Hamas, Hezbollah and al-Qaeda and the terrorists' motivation is growing."

The looming leadership battle threatens to split Likud, which translates as consolidation, and could jettison the party from its position of power in the coalition government, where it holds 40 of the 120 seats.

Meir Shetreet, a Cabinet minister and close ally of Mr Sharon, said: "I’ve never before seen collective suicide committed with such joy."

Mr Netanyahu enjoys healthy support among the party's 3,000 membership, with a 17-per-cent lead over Mr Sharon, but the withdrawal from Gaza has earned the Prime Minister greater appeal among the public.

Mr Sharon has countenanced the nuclear option of quitting the party that he helped to found 30 years ago and setting up a moderate rival to run against it in the election. His advisers have told him bluntly to "dump the party, before it dumps him."

The increasingly damaging feud is taking place in public. In an interview on Israeli television on Monday, the Prime Minister unleashed an unprecedented attack against Mr Netanyahu describing him as an "uptight and impressionable individual" prone to panic.

"He panics and loses control. I’ve seen him like that more than once, many times," he said.

"To run this country, to deal with the most complex and difficult problems, you need judgment and nerves of steel. He (Netanyahu) has neither of these two things."

Israeli analysts believe that Likud hardliners are now so intent on exacting revenge upon Mr Sharon that they are unconcerned that this could also bring down the party.

"Sharon’s problem is that the Likud has stopped acting rationally, and now they are all acting from their gut," political commentator Ben Caspit told Army Radio.

"They are setting Rome on fire, and Netanyahu is playing the fiddle."

The Israeli Army completed its historic evacuation of 25 settlements in the Palestinian territories in a week, clearing 21 villages in Gaza and four in the West Bank of around 9,000 residents.

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