ISRAELI PRIME Minister Ariel Sharon succeeded this week in taking an important step toward the removal of Israeli settlements and soldiers from the Gaza Strip -- only to be overshadowed by the potentially grave illness of his old nemesis. Mr. Sharon's victory in a vote by the Israeli Knesset on Tuesday night appeared to restore momentum to his withdrawal initiative after a series of reverses in the past six months. But that was before the collapse hours later of Palestinian leader Yasser Arafat, who yesterday appeared to be on his way to Paris for emergency treatment. Mr. Arafat's incapacitation, if it proves enduring, could dramatically change the Israeli-Palestinian landscape and force Mr. Sharon to rethink his unilateral project, which is based on the idea that there is no Palestinian leadership with which Israel can strike an agreement on Gaza and other territories.

Even if the Israeli leader pushes forward, he will face continued political challenges. He may be forced to hold a national referendum or general elections. Still, Mr. Sharon now has most Israelis on his side. Whatever the developments of the coming days, he deserves support for his willingness to fight for what would be a historic dismantling of settlements on territory that could form part of a Palestinian state.

The Bush administration has backed Mr. Sharon all along; at a White House meeting in April President Bush rashly promised the Israeli leader that he would support not only the evacuation but eventual Israeli annexation of some settlements in the West Bank. That is where the trouble with Mr. Sharon's initiative begins. As he has frequently suggested, the prime minister's aim is to use the Gaza withdrawal to unilaterally consolidate Israel's hold over large parts of the West Bank and indefinitely postpone the creation of any Palestinian state. This larger ambition is entirely at odds with Mr. Bush's "road map" for the Middle East, which calls for a Palestinian state in the West Bank and Gaza as early as 2005 and a negotiated settlement on borders and refugees.

Administration officials contend that by supporting Mr. Sharon in the Gaza withdrawal, they are paving the way not for his long-term plan but for the president's. There is some logic to this view: If Mr. Sharon can establish a precedent for withdrawing settlements, then it may be easier to undertake the retreat from West Bank settlements necessary for creation of a viable Palestinian state. It was for that reason that U.S. officials insisted last year that Mr. Sharon add four small West Bank settlements to the Gaza initiative approved by the Knesset. Yet if Mr. Bush's vision is to prevail, his administration must end the latest hiatus in its activity in the region.

For the Gaza withdrawal to jump-start the Bush road map, moderate Palestinians must be coaxed into setting up a responsible administration in the territory that will curb violence against Israelis both before and after the withdrawal and demonstrate a capacity for statehood. Mr. Arafat's illness might make that job more complicated in the short term, but if his departure from the scene proves permanent, a major opportunity will open. U.S. diplomacy will be needed to encourage the election of new Palestinian leaders, orchestrate support from other Arab and European governments and stimulate fresh negotiations between the Palestinians and Israel -- including negotiations over Gaza.

Mr. Sharon also must feel genuine U.S. pressure to curtail the further expansion of West Bank settlements, especially those that lie beyond the borderlike security fence Israel is constructing. Mr. Bush avoided this tough work even before his reelection campaign. Should Mr. Sharon's success, and Mr. Arafat's incapacitation, endure through next Tuesday, they will offer major opportunities for presidential reengagement.