The Knowledge: Sharon and the future of the Middle East

Israel is in political turmoil, its coalition government breaking up. Prime Minister Ariel Sharon (pictured) has quit his right-wing Likud party, for over a generation the dominant force in the country's politics. Last weekend eight Labour ministers walked out of the Cabinet on the orders of their new leader Amir Peretz. That left a minority government, which means an election must be held - in which Sharon will lead a new party he has formed, to be called Kadima, or Forward. Until polling day Sharon will remain as Prime Minister.

Why has Ariel Sharon just quit Likud?

He has been in a running battle with a large hard-right section of Likud who never accepted his withdrawal of Israeli troops, and settlers from Gaza last August do not share his declared backing for an (eventual) Palestinian state, and were determined to replace him as leader. Maybe, despite polls showing otherwise, he feared losing the leadership. But it is more likely that he wanted the freedom of manoeuvre a new party would give him.

Who are the other key figures and what do they stand for?

First of the big players is Amir Peretz, who ousted Shimon Peres, the veteran leader of the Labor party. Peretz believes passionately in social justice and more economic equality for Israelis, as well as a negotiated peace with the Palestinians, picking up where the late Yitzhak Rabin left off. The second will be whoever emerges as the Likud leader. Benjamin Netanyahu, Sharon's bitter rival, and the man who more than any other made the PM lose his patience with Likud, is still the favourite. He is the standard bearer of the hard right, economically as well as in relations with the Palestinians. As a politician who believes in cutting welfare but also, for now at least, in funding the huge costs of the occupation, he is an ideal target for Peretz. Which is why two rivals have emerged for the Likud leadership. Silvan Shalom, the foreign minister, who like Peretz is North-Africa born, has a visceral understanding of his party; Shaul Mofaz, the defence minister, is of Iranian Jewish descent. Also not being an Ashkenazy European-descended Jew, he believes he can match some of Peretz's appeal. As a tough guy ex-military chief of staff he has a network of senior army reservists backing him. Predictably, in view of the Peretz challenge, both Shalom and Mofaz have discovered their hitherto little-known egalitarian credentials, attacking Netanyahu for being anti the poor, with Shalom having the more memorable soundbite - that Netanyahu was a "cream-fed kid from Rehavia", a prosperous and fashionable neighbourhood of Jerusalem.

What does Israel's political make-up mean for the peace process?

If Sharon forms a third government, the optimists think he could finally show some interest in negotiations with the Palestinians. He insists that the internationally agreed Road Map is the only way forward. But his restrictive interpretation of it requires the Palestinian leader, Mahmoud Abbas, to clamp down on the armed factions in a way that may be impossible for him to do. Instead, Sharon may want to fix the borders of Israel unilaterally, withdrawing settlements east of the separation barrier but annexing what is west of it. This is something which Abbas would find well-nigh impossible to agree to, even as an interim solution. Peretz, as PM, would certainly want to pursue genuine negotiations. And Likud would be unlikely to let whoever leads it do so, even if he wanted to.

When is the election and what is going to happen?

28 March. Pass on the second question. This is the first Israeli election for a long time in which any of three parties could come ahead. Current polls suggest Sharon comes out ahead with around 30 seats, Labour second with an improved showing of around 26 and Likud a poor third at perhaps 12. But anything could happen.