Israel's Netanyahu wins re-election as Likud chief

JERUSALEM, Aug 15 (Reuters) Former Prime Minister Benjamin Netanyahu easily won re-election as head of the rightist Likud party and pledged today to reclaim Israel's leadership.

A year after the Likud was routed in a national election, Netanyahu has rebounded in opinion polls that have shown a steep plunge in the popularity of Prime Minister Ehud Olmert, who leads the centrist Kadima party.

Final official results of yesterday's Likud balloting gave Netanyahu 73.2 per cent of the vote against his main challenger, West Bank settler Moshe Feiglin, who opposes relinquishing Israeli-occupied land to the Palestinians.

''The internal battle ended tonight and tomorrow we will focus our efforts on bringing Israel a new leadership,'' Netanyahu, 57, said in a victory speech.

Speaking later to reporters, Netanyahu signalled he would seek to steer the Likud, Israel's main opposition party, towards a political middle ground.

''I think that in a very persuasive and clear way we are striding along our centre path. I think the majority of the public wants it this way,'' he said.

Despite the U S-educated Netanyahu's hawkish views, his 1996-1999 term as prime minister was marked by a handover of some occupied land to the Palestinians -- the transfer of part of the West Bank town of Hebron under pressure from Washington.

A Netanyahu win in the party vote was never in doubt. He has the support of many Likud faithful who, like Netanyahu, had opposed pulling Israeli troops and settlers out of the Gaza Strip -- now controlled by Hamas Islamists -- in 2005.

Netanyahu quit Ariel Sharon's government shortly before the withdrawal, cautioning that quitting the coastal territory unilaterally, 38 years after its capture in the 1967 Middle East war, would only reward Palestinian militants fighting Israel.

The warnings are regarded by many Israelis as having been prophetic. Militants frequently fire rockets from Gaza at southern Israel and Israeli troops often cross back into the area to attack gunmen.

REBOUND Raising his arm in victory in the spotlight of television cameras early today, Netanyahu seemed poised to build upon his strong showing and traditional support from Israel's business community.

A vocal advocate of free market policies, he is widely seen in Israel and among financial institutions that deal with the Jewish state as having turned its economy around while serving as Sharon's finance minister.

But whether the Likud, Israel's main opposition party, can claw its way back to power is an open question. The party won only 12 seats in the 120-member parliament in last year's election, down from 38 in the previous poll.

A general election is not due until 2010. But Olmert has been plagued by a string of corruption scandals and a potentially damaging final report by a government-appointed panel examining the Lebanon war is still pending.

Some political commentators anticipate a national ballot as early as next year, with another former prime minister, Labour Party leader Ehud Barak, also poised to challenge Olmert.

REUTERS AE HT1324