By Lee Hockstader
Washington Post Foreign Service
Tuesday, January 26, 1999; Page A13

JERUSALEM, Jan. 25—Prime Minister Binyamin Netanyahu fended off one challenge to his leadership today, but his victory was overshadowed by the emergence of another, potentially more potent adversary four months before a general election.

In Likud party primaries, the Israeli premier appeared to have easily dispatched his old mentor, former defense and foreign minister Moshe Arens, and retained his position as the conservative bloc's leader and candidate for prime minister. Israeli television exit polls suggested Netanyahu received at least three-quarters of the primary vote.

But the effortlessness of his victory belied the turmoil that has beset Likud, and Israeli politics generally, since Saturday, when he fired his popular defense minister, Yitzhak Mordechai, citing his "unprincipled" flirtation with the opposition.

This evening, Mordechai announced he will seek his revenge against Netanyahu in what has become an extraordinarily public grudge match. He announced his candidacy for prime minister as leader of an emerging centrist party that includes three well-known figures, all of whom have had public rifts with Netanyahu: former military chief of staff Amnon Lipkin-Shahak, former finance minister Dan Meridor and former Tel Aviv mayor Roni Milo.

Netanyahu has branded all four members of the as yet unnamed centrist bloc as "losers," singling out Mordechai for especially pointed disdain. Today, he suggested the centrist party is a rudderless "fake" that will merge eventually with the left.

But in Mordechai, a gruff former army general with a reputation for integrity, Netanyahu faces a new type of adversary. Born in the Kurdish region of Iraq, Mordechai, 54, is the first Sephardic Jew to seek the nation's top job in a political arena long dominated by Ashkenazi Jews -- those of European descent.

With his distinguished military record and strong appeal among blue-collar and religious voters, Mordechai could cut deeply into Netanyahu's core constituencies, polls suggest. As Likud's top Sephardic politician, he was a critical electoral asset for Netanyahu in the 1996 elections and is well respected as a moderate among Palestinian and Arab leaders and in Washington. His defection is a blow to the party, analysts agreed.

Mordechai "is a stereotype-busting politician," columnist Nahum Barnea wrote Sunday in the Israeli daily Yedioth Aharonoth. "At long last there comes a man who just might be able to break the [Jewish] tribalism between east and west, between left and right, a tribalism that is terribly destructive."

At a news conference today, Mordechai outlined the party's still vague platform, favoring negotiations with Palestinians and Israel's Arab neighbors, help for immigrants, women, students and the unemployed and continued privatization of state property.

Netanyahu now finds himself beset not only by Ehud Barak, leader of the opposition Labor Party, but also by former allies who once formed the top echelon of his cabinet and party. In addition to Mordechai, Meridor and Milo, those who have quit his government or Likud include former foreign minister David Levy, former science minister Binyamin Begin and former finance minister Yaacov Neeman.

Nonetheless, nearly four months remain before Israel's May 17 elections, and so far none of the declared candidates has proven himself as agile a campaigner and television presence as Netanyahu. Shahak, the darling of the Israeli media and a soaring star in the polls just a month ago, has seemed to stumble of late. Immediately after his lackluster announcement as a candidate for prime minister early this month, he was pelted with vegetables at a Tel Aviv market where Netanyahu is popular, and his poll ratings plummeted.

Today, Shahak and Meridor both dropped their bids for the nation's top office and, with Milo, agreed to support Mordechai. Little unites the four beyond intense dislike for Netanyahu, whom they condemn as dishonest and duplicitous.

Although Netanyahu has been on the rhetorical offensive, his party seemed deeply shaken by the recent defections, and his political standing is in doubt. Polls suggest that Mordechai could lure away a third of past Likud voters and that Netanyahu would lose either to him or to Barak in a runoff election.

"The Likud is passing through a crisis the likes of which our movement has not seen in all 75 years of its existence," said Arens, 73, the party's elder statesman.

Turnout in the primaries was apparently less than one-third of the 160,000 Likud members eligible to vote.