TEL AVIV (May 18) - Just 30 minutes after exit polls showing a clear victory for One Israel leader Ehud Barak were announced on TV last night, Prime Minister Binyamin Netanyahu conceded electoral defeat and announced his intention to resign from the Likud's leadership.

Flanked by his wife Sara and Foreign Minister Ariel Sharon, Netanyahu told a crowd of supporters at the Tel Aviv Hilton Hotel that "for 20 years I've made a contribution to the Israeli public. I still have a contribution to make to our country, but I think that the time has come to take a break, to be with my wife and young children, and consider the future."

Netanyahu thanked his supporters, who yelled "No, no" in response to his resignation, and called on them to keep calm, saying this is a time for unity.

He congratulated Barak on his win and thanked Sharon specifically, a move many saw as crowning him as his heir for party leadership.

Sharon later told reporters that the announcement had come as a surprise and called on Netanyahu to continue as party head. Asked if he saw himself as Netanyahu's heir, he said, "it is too early to answer."

Communications Minister Limor Livnat also said the announcement took her by surprise. She added, however, that "just as the Likud lost the elections in 1992 and thought it was for eternity, this time too it will not be the end of the party. The main thing to do now is to rebuild the party."

Asked about her future, Livnat said: "I am here and I'm staying here."

As Likud activists called out support for Netanyahu and the party and booed at mention of Barak's name, Sharon said: "The first thing to do is to act quietly and behave with dignity. I want to look forward, and we can't solve anything by shouting."

Sharon praised Netanyahu for sticking to the target in a difficult fight, which he said was fought with limited means.

"It was one of the toughest fights, but we fought for a way, and our way is the right way for Israel's future and security and I'm convinced this way will ultimately win."