Israeli Elections: Likud smashes Labour; Shinui gains big.

[The Duchess of Zeon]

JERUSALEM (Jan. 29) - Prime Minister Ariel Sharon's Likud party rode to victory in an Israeli election on a wave of support for his tough line with Palestinians, humiliating leftist parties that had pursued Middle East peace deals.

Greeted by flag-waving supporters who burst into song, Sharon claimed victory early on Wednesday and urged parties to join him in a broad government to meet the twin challenges of what he called terrorism and a possible Gulf war.

Labor Party leader Amram Mitzna conceded defeat in a telephone call to Sharon soon after voting ended on Tuesday. Results showed Likud storming back into power, replacing Labor as the biggest party in parliament.

Labor endured its worst-ever defeat, falling to 19 seats from 25 in the 120-member parliament, reflecting Israelis' fury at the party's having put its faith in Palestinian President Yasser Arafat to make peace.

Hundreds of Israelis have been killed in scores of suicide bombings carried out by militants at the forefront of a 28-month-old Palestinian uprising.

Labor's former partner in peace moves, the leftist Meretz party, was shown winning 6 seats, down from 10, while Likud soared to 37, up from 19 in the current Knesset.

Further underscoring divisions, the upstart Shinui party swept into third place, with 15 seats, up from 6, on a pledge to deny ultra-Orthodox Jewish parties their historical role as political power brokers able to demand state cash and benefits.

Although Sharon did not deliver the peace and security he promised when elected in February 2001 -- and few expected him to do so now -- he flaunted his credentials as a veteran general and experienced politician to convince Israelis he was the best person to lead them through such troubled times.

President Moshe Katzav was expected to ask Sharon to form a new government to tackle a deep economic crisis and the Palestinian revolt for an independent state.

"This is a heavy blow to a peaceful settlement. The Israelis have committed a historical mistake which they and the Palestinians will regret," Palestinian Information Minister Yasser Abed Rabbo said.

COALITION IN THREE WEEKS

Sharon's campaign aide Lior Horev told Reuters that the 74-year-old prime minister would within three weeks forge a government of right-wing, religious and centrist parties that could give him up to 68 seats, a narrow majority, in parliament.

Then, perhaps after a war in Iraq and with peace moves on the horizon, Sharon could firm up his government by persuading Labor to join, Horev said.

Sharon fears forming a right-wing coalition that could put Israel at odds with chief ally Washington over such issues as building Jewish settlements on occupied land, while the Bush administration prepares for possible war with Iraq.

The future of peacemaking with the Palestinians will be shaped largely by which parties join a coalition. A government joined by ultra-nationalists could harden Sharon's already tough line against the Palestinian uprising.

Flag-waving Likud supporters burst into song and screamed "Ariel, Ariel" at the party's headquarters. Downcast Labor supporters gasped in dismay as television projections were shown on a big screen at their headquarters.

"It is time to come together," Sharon said.

To reach out to other parties, Sharon made a point of quoting both the Bible and slain Labor Prime Minister Yitzhak Rabin, killed in 1995 by an ultranationalist Jew opposed to peace moves with the Palestinians launched in Oslo in 1993.

In a speech Mitzna, 57, said Labor would be a "fighting opposition and an alternative" to a rightist government. Labor bolted Sharon's government in October, forcing a new election.

"We do not intend to join, but to replace him," he said.

Election officials said other vote-getters were: the ultra-Orthodox Shas party with 11 seats, the far-right National Union with 7, the National Religious Party with 5, United Torah Judaism with 5, Hadash with 4, two Arab parties with a total of 5, the welfare One Nation with 4 and the immigrant party Yisrael B'Aliya with 2.

The Green Leaf party, which advocates legalizing marijuana, won no seats despite opinion polls which said it would enter parliament. By law, results will become official on February 5, eight days after the vote.

'WE WILL CHANGE ISRAELI SOCIETY'

The leader of Shinui, Nazi Holocaust survivor Yosef "Tommy" Lapid, rode a wave of public resentment over the military exemptions and other privileges reserved for religious Jews.

"We will change the face of Israeli society," the 71-year-old pundit-turned-politician told cheering supporters.

Sharon will have 28 days to form a government but can be given up to 14 more days if, as expected, he finds it difficult to build a coalition. If Sharon fails, Katzav will ask another newly elected member of parliament to try.

Turnout among the 4.7 million registered voters was the lowest for an Israeli general election -- 68.5 percent compared with an average of 78 to 80 percent. Israelis, having gone to the polls three times in four years, voiced weariness.

"I'm not voting because anyway in another two years we'll have elections again," said Arieh Geiger, a young Israeli.

Sharon has said painful concessions are needed to make peace but offered no new ideas for ending a conflict in which more than 1,800 Palestinians and almost 700 Israelis have been killed since September 2000.

Palestinians spent the day under a blanket travel ban imposed by the army in the West Bank and Gaza Strip.

01/28/03 23:20 ET