Fears grew of a Palestinian backlash after today's prime ministerial election following the death of an Israeli soldier during fierce exchanges of fire in the Gaza Strip. The soldier was hit by a single bullet near the Palestinian refugee camp of Rafah. Israeli troops retaliated with rocket-propelled grenades.
Opinion polls predict the Prime Minister, Mr Ehud Barak, will be defeated by 18 to 20 percentage points by Mr Ariel Sharon. In a late appeal for votes, Mr Barak said the choice was between war and peace.
A member of the Israeli parliament and close associate of the challenger, Mr Uzi Landau, outlined Mr Sharon's approach: "First of all he is going to do exactly what the British are doing in Northern Ireland - if the Palestinians want to continue to negotiate with us, they have to stop terrorism."
It was taken as a reflection of Mr Sharon's confidence that he withdrew from the campaign yesterday and spent the time with aides and strategists from his Likud party.
Already attention is beginning to focus on Mr Sharon's prospects of forming a government. He is expected to try to form a national unity coalition and there is speculation he may invite his opponents in the Labour Party to fill posts of defence and foreign affairs.