Sharon loses party vote on Palestinian state

Israeli Prime Minister Ariel Sharon, left, and political rival Benjamin Netanyahu locked horns Sunday at a Likud Party conference.

TEL AVIV, Israel (CNN) -- Israeli Prime Minister Ariel Sharon suffered a political blow with his Likud Party's vote voicing opposition to the creation of a Palestinian state over his strong objections.

The party's Central Committee voted overwhelmingly Sunday for the resolution -- proposed by former Prime Minister Benjamin Netanyahu, Sharon's main political rival.

Sharon tried to block the vote, saying any decision would be "dangerous to the state of Israel and will only intensify the pressure on us."

But around midnight, at the end of a stormy Likud Party meeting, 59 percent of the 2,600 voting members decided by secret ballot to oppose Sharon and vote for Netanyahu's proposal.

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The prime minister had argued the issue of Palestinian statehood was not on the Central Committee's agenda and a decision on the topic would only harm efforts to reach peace in the Middle East.

"Together we will lead the state of Israel, together we will overcome terrorism, together we will make peace," Sharon said. "With God's help, we will win."

Sharon has said he would support the formation of a Palestinian state as part of a final peace agreement with the Palestinians.

Netanyahu: It's a vote against Arafat

Afterward, Netanyahu said the vote should be interpreted not as a political contest but as a policy issue on how to relate to Palestinian Authority President Yasser Arafat.

"The question is: Do we reward the campaign of terror that Arafat has launched against us for 18 months with the promise of a Palestinian state that could turn into a fortress of terror against us? And people resoundingly said 'No.' They don't want that," Netanyahu said.

"They want peace, they want unlimited self-government for the Palestinians. ... But they don't want that self-government to have those sovereign powers that destroy the Jewish state -- for example, the right of a Palestinian state to make military pacts with Iraq or Iran and so on."

Netanyahu laid the blame for continuing suicide attacks at the feet of the Palestinian leader. "Arafat is not doing a damn thing to stop it, and at the same time, he's going to get diplomatic rewards?"

Monday, Israeli Foreign Minister Shimon Peres said the vote was "tragic, tragic for the state of Israel."

In an interview with Israel Army Radio, Peres said if Netanyahu ousts Sharon and becomes the head of the Likud Party, he will have to deal with Arafat again, just as he has before.

"I understand that this is a battle for power, but I am convinced that if Netanyahu is elected, he will be as he was before previous elections. He was in favor of Oslo and he shook Arafat's hand," said Peres.

The Oslo agreements are a set of interim peace accords between Israel and the Palestinians that are intended to lead to a final settlement between the two parties.

Palestinian negotiator sees 'dangerous development'

Palestinian chief negotiator Saeb Erakat reacted angrily to the vote, calling it "a very dangerous development."

"I think that this is a very clear-cut message that the war being waged by Israel against the Palestinians is not a war against terror, as they call it," Erakat said. "It's a war to maintain occupation, it's a war to sustain occupation, it's a war to beef up the settlement activities and to introduce more and physically impact on the ground as far as Jerusalem is concerned."

Palestinian leader Yasser Arafat called the vote "the destruction of the Oslo agreement."

The Likud decision is nonbinding and its practical impact on Sharon's diplomatic efforts in the Middle East remains to be seen.

The U.S. government reiterated that President Bush's "vision" for the region remains two states -- "an Israel and a Palestine, living together side by side in peace and security and that is the goal toward which this administration will work," said a senior Bush administration official.

The official downplayed the significance of the vote, calling it more a matter of "party politics" in Israel than a true setback for the peace process.