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It's been a long time since we've seen Ariel Sharon so upset. He lost his cool and his gramps-like grin attacking Tzachi Hanegbi: "Don't let it go to your head that you came out in first place in the primaries; we know about the election methods... It is unthinkable that I express support for the establishment of a Palestinian state under conditions I set, while other party members come out against my position."

But Hanegbi wasn't ruffled; and in front of the microphones, he answered Sharon, "You won't dictate my political positions; I am opposed to a Palestinian state."

Sharon's anger was aroused because Hanegbi disrupted the former's show. The prime minister really wanted to say something like this to Hanegbi: "Tzachi, old boy, I'm a bigger opponent of a Palestinian state than you are. Who built all the settlements in the heart of Samaria? Who told the settlers to go `grab every hilltop' so as to torpedo the Oslo accords? Who's building a promenade between Kiryat Arba and the Tomb of the Patriarchs. You know I have to present a `moderate' policy only because I want the voters from the center, and so that Bush will give me the guarantees and grants, without which the economy will collapse a lot sooner than you can imagine."

Indeed, Sharon has no intention of going into negotiations, not with Arafat, nor with anyone else. His only goal is to survive the next four years in power, just like he has done over the last two years - without doing anything and without initiating anything.

But the problem is that the coming four years won't be so easy. The Israeli economy and its society won't hold on that long. The accompanying graph shows the state of the economy, and the direction it's heading is clear and unequivocal.

This is not some ordinary economic recession, no normal decline in demand in a conventional business cycle. This is a grave crisis, the result of a long-lasting terrorist war that strikes at the heart of the civilian population.

Despite Sharon's slogan "to bring peace and security," he has failed on the security side, let alone the peace side. The war has not been decided, despite all the assassinations, operations, conquests, house demolitions, closures, curfews, checkpoints, settlement expansions, suffering by the civilian population and the destruction of the Palestinian Authority and Arafat as its leader.

But, meanwhile, the Israeli economy is being destroyed, The public has lowered consumption, and investors have halted investments. Tourists ran away and the economy went into a vicious downward spiral back to 1995's standard of living, with the gap between the rich and the poor reaching a dangerous record level.

Sharon's continued regime means more "operations" in the West Bank and more terror in the country, digging the hole even deeper for the economy and society. This week, the Manufacturers' Association issued an assessment of what to expect in 2003 - negative growth and 12.2 percent unemployment, which means another 45,000 added to the jobless rolls.

The situation, therefore, requires shock treatment, and this is precisely what Amram Mitzna is proposing. He promises that when elected, he will immediately evacuate the Gaza settlements. Such a unilateral move, which the vast majority of Israelis support, will send the message to the other side that there is someone on this side to talk to, someone with whom to strike a deal, a political horizon. Then, says Mitzna, he'll call on the Palestinian leadership to renew the negotiations, along with a commitment to end the terrorism.

The minute that happens, reality will change. A new reality will mean a new mood. When terror ceases, personal security will return. And then the public will be back in the shops; the industrialists will resume investment; the tourists will (slowly) come back; and foreign investment will resume in the hope of finding bargains a minute before the growth takes off. Even the stock market will go up, because expectations for the future will suddenly seem brighter.

Only then will society will begin to pull itself together after the two horrible years it has been through. Only then will it possible to find work for the unemployed, revive the human dignity of those who get guaranteed income allotments, build new factories, open shops and businesses, start new production lines, reopen the dozens of restaurants that have closed - and stop the talk of despair and the emigration out of the country.

In other words, there is another way to do things, an alternative. But neither Ariel Sharon nor Tzachi Hanegbi can offer it to us.