Hours after Prime Minister Ariel Sharon lashed out yesterday against the right's "campaign of incitement," some 40,000 settlers and their supporters rallied in downtown Jerusalem against his disengagement plan, calling Sharon a "dictator" and demanding the National Religious Party quit the coalition and bring down the government.

The demonstrators - mostly teenagers, and almost all wearing the knitted scullcaps of the national-religious community - did not display the kind of extremist placards seen at similar rallies in the 1990s, when Yitzhak Rabin was prime minister.

But Sharon was called a dictator - a term used to describe Rabin in the weeks leading up to his assassination - and many placards depicted him as "not giving a damn" about the public, or saying that he had "disengaged" from the public.

Police estimated that about 40,000 people filled the Zion Square intersection of Jaffa Road and the Ben Yehuda promenade in downtown Jerusalem. But the settlers - who kept politicians off the stage - said there were as many as 70,000.

The main slogan of the rally was, "The disengagement is splitting the people," and while many of the placards took aim at Sharon, the real target of the rally seemed to be the National Religious Party, which since 1977 has made settlement the centerpiece of its platform. The NRP central committee is meeting today to decide whether to finally quit the coalition. There was no doubting the mood of the rally - the settlers want the NRP to leave the coalition in the hope it brings down the government. After the rally, some of the demonstrators marched by torchlight to the Prime Minister's Residence in Talbieh, but no untoward events were reported.

"We are currently witnessing an extremely serious campaign of incitement, including calls aimed at civil war," Sharon said at the opening of yesterday's weekly cabinet meeting. "I view this extremely gravely," Sharon told ministers, referring to recent calls on the right for soldiers to refuse settlement evacuation and warnings that the disengagement could lead to violence against soldiers or even civil war. "I think that threats against Israel Defense Forces officers and defense establishment personnel are an extremely grave phenomenon," he said.

Sharon demanded that settler leaders "who are embarking on a campaign of incitement stop it immediately. Disagreements are possible, but keep the defense establishment out of it."

He also ordered Defense Minister Shaul Mofaz and acting Public Security Minister Gideon Ezra to do everything possible to ensure that the settlers' threats are not realized, and demanded that all ministers speak out on the subject.

While the rally was underway in Jerusalem, Sharon was speaking at a Tel Aviv gathering of Likud political activists, for a New Year's toast. He called for an end to "the hatred and incitement: and said "this cannot go on, it simply cannot go on, because our plans will be implemented in all fields. Everything will go on and progress. It can be done in good spirits or it can be done with difficult struggles that are unnecessary."

He said he wanted "to believe that among the leaders of the opposition there is responsibility and that all the talk that has been heard will stop and that nobody will dare lift a hand against a soldier or policeman or any member of the security forces."

He said that the Likud "is the only political body nowadays that can run the affairs of state but it is necessary for there to be unity in the party ... regrettably there are things that have come to light that definitely make it difficult for the Likud to run the affairs of state."