And Sharon wasn’t even prime minister yet. Ehud Barak, the man he trounced, still served as a caretaker. Because Sharon’s Likud Party has only 19 of the 120 seats in the Knesset, he cannot rule without forming a stable coalition. He would prefer a “unity government” including Barak’s Labor Party. “Sharon badly needs a deal with Labor to show the world he’s not so extreme,” says Zeev Shiff, a political columnist for the daily Haaretz. But some powerful left-wing Laborites, including Justice Minister Yossi Beilin, warn that an alliance with Sharon could split the party.

Sharon’s other option is a right-wing coalition, which would give him a thin majority in the Knesset. To moderates, that’s a scary prospect. One figure who could play an influential role in a right-wing coalition is Avigdor Lieberman, a leader of the hardline National Union Party. He says Israel should reoccupy the West Bank town of Beit Jala, where Palestinians have been shooting into a nearby Jewish area. A right-wing cabinet might include Rehavam Zeevi, who supports the “transfer” of all West Bank Arabs to neighboring Jordan.

Sharon has talked about concluding an “interim agreement” with the Arabs that could pave the way for a comprehensive settlement later on. But the Palestinians could decide there is little to be gained from trying to bargain with Sharon and instead take their frustration into the streets again. “When the shooting starts again and cars start exploding in the middle of Jerusalem and Tel Aviv, then we’ll see how short his fuse really is,” says a senior Israeli military source. “He’ll be out there razing houses, doing whatever it will take to stamp it out. But there is a price to be paid–and the price may be war.” That’s a terrifying prospect to both sides, and one that is not implausible as Ariel Sharon comes to power.