Landau's withdrawal means the contest for leadership of the party will now be between Netanyahu and former Israeli defence minister Moshe Arens, who returned to the political arena after a six year absence in order to challenge the premier.

The hawkish Landau said he was withdrawing from the contest because he did not want to split the anti-Netanyahu forces within the Likud. His challenge had lasted a mere 18 days.

The Likud is to vote on its leader, who will also be the party's candidate for prime minister in elections scheduled for May 17, on January 25. Recent polls say the anti-Netanyahu forces within the Likud have no chance of toppling the prime minister.

While Arens, considered Netanyahu's former political mentor, is the premier's only challenger from within the party, two ofNetanyahu's former ministers have left the Likud to enter the race for prime minister.

Former finance minister Dan Meridor, a scathing critic of Netanyahu's character, is being linked to a new centrist party being formed by former army chief of staff Amnon Lipkin-Shahak.

Hardline former science minister Benjamin Begin has said he is running for premier at the helm of a new right-wing party which he hopes will attract votes from hard-line Israelis opposed to Israeli concessions to the Palestinians.