Sharon fights back as scandal endangers his bid for re-election

JERUSALEM -- With a widening corruption scandal endangering his re-election campaign, Prime Minister Ariel Sharon on Wednesday angrily denounced reports he is under police investigation for receiving $1.5 million from a South Africa-based businessman.

Three weeks before Israel's Jan. 28 election, Sharon's once-comfortable lead in the polls has been steadily dwindling since allegations surfaced of vote-buying and underworld involvement in last month's primary, in which his Likud chose its candidates for parliament.

After he called elections in November, polls showed Likud and its hard-line allies winning a clear majority in parliament over the dovish Labor Party and its partners. The gap has been steadily eroding, throwing the election outcome into some doubt and suggesting postelection coalition-building efforts could be prolonged and complex.

Poll shows shift

A poll broadcast on Israel TV, to be published Thursday in Haaretz, showed a dramatic shift. It showed Likud, which was winning 41 out of 120 parliament seats a month ago, now at 27, with Labor winning 24 seats and the reformist Shinui Party winning 17. Contacted by The Associated Press, Haaretz confirmed the poll but would not provide details.

Earlier Wednesday, Israel's attorney general, Elyakim Rubinstein, confirmed a police investigation is under way into a $1.5 million transfer a year ago to bank accounts in the names of Sharon's sons.

He told Israeli radio and TV stations that the South African government has been approached to arrange a deposition from the businessman who provided the funds, Cyril Kern, a friend of Sharon's for more than 50 years.

Haaretz reported Tuesday that Sharon and his son Gilad were under police investigation over the funds, basing the story on a Justice Ministry document. Rubinstein echoed Sharon's charge that the leak about the investigation was politically motivated.

Sharon on Wednesday hotly denounced the latest charges.

"We're talking about a disgraceful political slander," Sharon told reporters. "I will disprove this slander with documents and facts. Those who are spreading this political libel have one aim: to bring down the prime minister."

Overshadowing issues

Sharon's political opponents were quick to seize on to the latest scandal in broadcast campaign spots. Labor's candidate for prime minister, Amram Mitzna, called Sharon "the Godfather," and the dovish Meretz called him "the father of corruption."

The scandals continued to overshadow political and security issues. Mitzna charged in a TV spot on Tuesday that Sharon had failed to quickly build a security fence around the West Bank designed to keep Palestinian attackers from infiltrating into Israel.

The construction of such a fence began last year at the insistence of Labor -- a member of Sharon's coalition until it bolted in November. But only a few miles have been completed, reflecting Sharon's discomfort with the project, which is opposed by Jewish settlers, a key Sharon constituency, most of whom would end up on the "Palestinian" side.

On Wednesday, in response to Mitzna's charges, Sharon traveled to the Israeli Arab village of Salem, next to the West Bank, at the northern edge of the fence project.

From the hilltop observation point where Sharon and his entourage were shown the work in progress, the border fence could be seen curving up into wooded hills, reminiscent of Israel's border with Lebanon.

With reporters watching, Sharon received a briefing from military commanders, who pledged to have the first section of the fence completed by July.

Sharon also criticized Mitzna's proposal for a unilateral Israeli withdrawals from Gaza and some West Bank land if peace negotiations fail. "Anyone who proposes unilateral withdrawal under fire to this line, in this place or elsewhere, is simply inviting more terrorism without getting anything at all from the other side," he said.