Former prime minister and finance minister Benjamin Netanyahu launched his campaign to lead the Likud and regain the premiership Wednesday with a verbal assault on the current party leader, Prime Minister Ariel Sharon, accusing him of promoting policies that threatened the future of Jerusalem.

"Sharon has created a precedent which is likely to lead to the division of Jerusalem," Netanyahu told reporters during a tour of E1 - the area between the West Bank settlement of Ma'aleh Adumim and the capital.

"Jerusalem is in danger, and Sharon is making [the threat] greater. He determined that Jews should be uprooted to the 1967 lines from Gush Katif [in Gaza] to the southern outskirts of Ashkelon. The second threat he poses is that he is the one who delayed the construction between Ma'aleh Adumim and Jerusalem."

Netanyahu issued a call to build 5,000 housing units in the area. He argued that such a neighborhood would determine whether Israel or the Palestinians will control the eastern heights adjacent to the holy city.

"The time has come to build here and I will build here," Netanyahu told reporters on the rocky hillside.

Netanyahu said that Sharon should have done much more on the ground to assure that the area stays in Israeli hands.

"We have seen on the hills that not a single home is being built by Israelis. The Palestinians have started building houses," Netanyahu said near Maale Adumim. "That is something that will change when we return the real Likud to power."

Netanyahu quit the government and his position as finance minister earlier this month, citing his opposition to the disengagement plan.

Washington has expressed concerns over the concept of construction in the area designated E1.

Israel has already announced plans to build a police station within the E1 zone.


PMO: NETANYAHU SPREADING LIES, FANTASIES

The step comes one day after Netanyahu announced his candidacy with a series of swipes at his main party rival, Prime Minister Ariel Sharon.

Responding to Netanyahu's Tuesday declaration, Sharon's office said that Netanyahu "continues to spread lies and fantasies."

According to the PMO, "He [Netanyahu] forgot that he received a strong party and left one with 19 mandates and a huge debt. It is difficult to address each of his lies specifically. He has proven that he is the leader of the extreme right, of the Feiglins."

Netanyahu's speech at a news conference in Tel Aviv included a sharp attack on Sharon, whom Netanyahu accused of "turning his back on the spirit of the Likud and threatening to destroy with his own hands the house he helped build."

Inside a crowded hall at Tel Aviv's Sokolov House, Netanyahu was flanked onstage by most of the rebel MKs and heard by an audience of dozens of activists, intended to provide the appearance of a fevered election campaign.

Accompanied by cries of "Bibi, Bibi" and frequent applause, Netanyahu sought to convey the central message that the Likud wants to spit out the man who betrayed his movement.

"I present my candidacy not only on the basis of past experience," he announced. "Every leader has the ability to develop, to grow and learn from past mistakes. I have gained experience, learned and am ready."

Netanyahu called on Sharon to run against him for leadership of the Likud and to honor the outcome. "I am announcing and am undertaking to accept the will of the voter in the democratic process and will remain in my home, in my movement.

"Arik, it's time you stopped running from the voter and defended your policy. I will present mine and we'll let them determine, and we'll honor their decision. Commit to remaining in the movement. This is democracy, Arik, and the time has come for you to respect it."

The event, staged a day after Netanyahu received the news that the Likud tribunal had ordered the party's central committee to convene to vote on advancing the primaries for party leadership, was meticulously planned, down to the cheers and the list of attendees, which included Knesset Speaker Reuven Rivlin, MK Yuval Steinitz, former minister Natan Sharansky, author Eyal Meged and the grandson of Zeev Jabotinsky.

But Baruch Hasan, a Sharon supporter from Netanya who managed to slip in, disrupted Netanyahu's speech with calls aimed at embarrassing him and was forcibly removed from the hall.

Senior officials in the Likud are pushing to hold primaries in February, and not in November as Netanyahu had announced, Army Radio reported Wednesday.

Currently, attempts to push up the elections for party chair are being done unofficially, and it is estimated that at this stage, the majority of officials support holding elections as early as possible.