There can be no peace under a dictatorial and corrupt regime

Ariel Sharon, Israeli prime minister

The prime minister was addressing the Israeli parliament (Knesset) for the first time since his Likud party voted against him and backed a resolution ruling out a Palestinian state.

Many people had expected Sharon to address the issue, but he avoided any mention of statehood and spoke only in general terms - calling on the Knesset to "avoid any steps that could hurt [Israeli] unity".

US support

Meanwhile, US Secretary of State Colin Powell reiterated America's support for the eventual creation of a Palestinian state.

Mr Powell said he had spoken to Ariel Sharon and received an assurance that he was committed to the notion of Palestinian statehood.

Sharon wants reforms to the Palestinian leadership, headed by Yasser Arafat

Mr Powell said the Likud vote did not have any bearing on the White House position.

"The prime minister and I discussed the decision made by the Likud committee and he reaffirmed to me that he remains committed to... that vision that I think most people have of a Palestinian state," he said.

But the Likud result was widely seen as a defeat for Mr Sharon, and a victory for the likely challenger for the Likud leadership, Binyamin Netanyahu.

Israel backs Sharon

Despite Mr Sharon's defeat at the hands of his own party, a poll published in a leading Israeli daily newspaper shows strong backing for the prime minister and suggests that six in 10 Israelis are in favour of a Palestinian state.

Poll of Israelis

55% back Sharon 23% back Netanyahu 63% were in favour of Palestinian state, 34% against

Source: Yediot Aharonot

According to the poll, carried out for the Yediot Aharonot newspaper, 68% of those polled and 64% of Likud supporters believed that the decision on backing a Palestinian state should have been postponed as Mr Sharon had proposed.

Asked who they would like to see as Likud's candidate for prime minister in the elections in November 2003, 55% opted for Sharon and 23% for Binyamin Netanyahu. Among Likud voters, the figures were almost identical.

Asked whether Israel should accept a Palestinian state in a final peace deal, 63% were in favour and 34% against.

Fighting continues

The Israeli offensive continued on Tuesday as forces staged four raids into West Bank villages, killing two Palestinian intelligence officers and arresting 15 suspected militants, the army said.

Ariel Sharon said such raids would continue.

He said the "fight against terrorism" which began with a massive offensive in the West Bank in March was not over.

"We haven't finished the job," he told parliament.

He said the army would continue to act "to frustrate acts of terrorism in the first stages".

Mr Sharon praised the so-called Operation Defensive Shield as a "very important step", saying 2,000 wanted men were captured.

He said that while the army would continue operating wherever it felt necessary, Israel had no intention of remaining in Palestinian areas.