By Jeremy Cooke BBC correspondent in Jerusalem

Binyamin - or "Bibi" - Netanyahu still commands passionate support from many in the Likud Party.

The man who served as Israeli prime minister from 1996 to 1999 is a charismatic and powerful political operator.

And now Bibi is back in the centre of the political spotlight. The former prime minister knows that the stakes are high.

Netanyahu is a hardline challenger

If he can beat Ariel Sharon to the party leadership on Thursday, he is almost certain to go on to win the general election on 28 January.

Mr Netanyahu is on the offensive with a message that is calculated to appeal to the right-wing activists in the Likud.

He kicked off the campaign promising that the first thing he would do, if elected, would be to expel Palestinian leader Yasser Arafat from the region.

The political strategy is obvious: Mr Netanyahu wants to win party support by being even more hard-line than Ariel Sharon, a man with his own reputation for being uncompromising with the Palestinians.

Mr Sharon is a formidable politician who has projected this image of consensual fatherhood of the nation, says the editor of the Jerusalem Report magazine, David Horowitz.

"He is perceived to be a safe pair of hands - not the opportunist that Netanyahu is seen to be a little bit, or the overly moderate figure that the new Labour leader Amram Mitzna presents - and therefore Sharon is proving to be somebody who Netanyahu is having real trouble shifting aside," Mr Horowitz says.

Divide

Perhaps the key policy difference between Mr Netanyahu and Mr Sharon is the proposed creation of a Palestinian state.

Mr Sharon is no enthusiast for the idea. But he has, it seems, come to see such a development as almost inevitable.

If you vote Sharon you vote for Palestinian statehood. If you vote for Bibi you vote totally against Palestinian statehood

Netanyahu supporter

But his challenger is firmly against the creation of a Palestinian state.

Mr Netanyahu has calculated that his policy will be popular among Likud supporters. But he knows it is also a direct challenge to American and European policy.

Perhaps that is why he seems determined not to articulate his position in his excellent English which would be well understood in London and Washington.

Mr Netanyahu's supporters are less timid. At a Likud convention in Jerusalem this week one of them told me he was backing the former prime minister over Ariel Sharon because Mr Netanyahu is vowing there will never be a Palestinian state.

"If you vote Sharon you vote for Palestinian statehood. If you vote for Bibi you vote totally against Palestinian statehood - and that's the most important thing now in this election".

High ratings

Amid it all Ariel Sharon is working hard, projecting the image of a prime minister still in command and fighting Palestinian extremists.

Almost two years ago he was elected promising the people of Israel "peace and security".

In many ways Mr Sharon has failed to deliver either. But he is doing well in public opinion polls and the prime minister's message is not changing.

We will be victorious in our war against terror and we will bring peace

Ariel Sharon

This is what he said recently while observing the latest Israeli military operations in the West Bank: "We will be victorious in our war against terror and we will bring peace, and we will do it much more quickly than people think.

"In this path, we will not be deterred until we reach a point of security - total security - and God willing - a diplomatic process which will bring peace."

Across Israel, the electorate has moved to the right in response to Palestinian attacks.

And that means the man who wins the Likud leadership becomes the most powerful politician in the country.

Mr Horowitz says it is "entirely fair to suggest that this internal Likud leadership choice this week will really be the choice of the next Israeli prime minister".

With so much to play for, Binyamin Netanyahu's camp is campaigning right down to the wire. But the last-minute polls suggest Ariel Sharon is likely to carry the day.