Sharon plans a total Israeli withdrawal from the Gaza Strip and the dismantling of some settlements in the West Bank, Israeli officials say. This would represent the first pullback by Israel from occupied territory since its withdrawal from a swath of southern Lebanon nearly four years ago.
Sharon's plan has won cautious international support. But some diplomats and analysts fear that it could end up being a substitute for negotiations toward an Israeli-Palestinian peace and possibly even deepen the conflict.
The plan would also be the first major change in control of Palestinian territory without direct negotiations between the two sides and the first evacuation of established Jewish settlements since Israel withdrew from the Sinai peninsula in 1980 as part of the Camp David accords with Egypt.
A White House official said last week it was too early to say that the president was ready to endorse the Sharon plan. But after meetings March 1 between aides to Bush and Sharon, National Security Council spokesman Sean McCormack gave an upbeat assessment, signaling that the White House would like to embrace it.
Bush's formal acceptance of Sharon's plan could come late this month or early next month - a tentative date for a Sharon trip to Washington.
Analysts say the ramifications of an Israeli pullout are potentially huge for Israelis, Palestinians, U.S. policy in the region and the war on terrorism.
One of the biggest uncertainties is what will fill the power vacuum in the Gaza Strip after the pull-out of Israeli troops, who now guard 17 Jewish settlements and patrol the border with Egypt.
Israeli and some U.S. officials dismiss the possibility that the militant group Hamas, responsible for attacks that have killed hundreds of Israelis, could end up seizing control of Gaza, saying the organization lacks the money and guns to crush the Palestinian Authority's security forces.
But even some Palestinians say the danger is real, given the collapse of the Palestinian economy and signs of continuing disintegration of the Palestinian Authority, headed by Yasser Arafat.
"They're crumbling. They're falling apart," said Edward Abington, a retired U.S. diplomat who lobbies for the authority.
After Israel withdrew from southern Lebanon, the militant group Hezbollah quickly moved to fill the void, gaining strong influence in the region. Hezbollah also boosted its prestige by claiming that its war of attrition against Israeli soldiers ultimately forced them out.
Another big uncertainty is how much of a withdrawal Israel will undertake in the West Bank. Bowing to U.S. pressure, Sharon plans to shift the route of the barrier Israel is building. The so-called wall or fence, which has become the source of an international outcry, will be brought closer to the armistice line that served as an unofficial border between Israel and Palestinian areas until the 1967 war.
But he also plans only a partial pullout from the West Bank, taking down only small outlying settlements deep in Palestinian territory.
"The Palestinians are obviously not going to get everything they want," said an Israeli official, speaking on condition of anonymity. Israel won't prevent, but won't encourage, Gaza settlers moving to established settlements in the West Bank, the official said.
The Israeli official also did not dispute news accounts that Sharon hopes to win U.S. acceptance of some of the most populous settlements, including Ariel in the center and Maale Adumim and the Etzion bloc outside Jerusalem. This would be the first American approval of any such land transfer outside of the negotiation process. Most of the world views the settlements as a violation of international law.
Another uncertainty is when the disengagement would occur. Israeli Embassy spokesman Mark Regev insisted the withdrawal "is not connected to the American political agenda," but said the process of parliamentary approval and a referendum could well push it past the U.S. elections in November.
Sharon's plan is widely seen as driven by the need to enforce a separation between Israelis and Palestinians that will keep suicide bombers out of Israel, something three years of tough military action has failed to do.
Israeli officials also want to reduce Israeli control over a large Arab population, which poses a long-term demographic threat to Israel's remaining a democratic Jewish state. His plan, together with his support for an eventual Palestinian state, is a sharp break with his own past as a champion of settlements and the position of his own right-wing Likud Party.
"It's not just statehood for Palestinians; it's the whole idea of partition and disengagement, the unilateral withdrawal from Gaza, the evacuation of settlements. With those statements, there isn't much meaning left to the traditional Likud ideology. So these are revolutionary statements," Dennis Ross, a former U.S. peace broker, told the Senate Foreign Relations Committee recently.
"Whatever is suggested by the Israelis has to be part of implementing a two-state solution. It can't be something that is the endgame," said Nabil Fahmy, Egypt's ambassador to Washington. "We're not in support of unilateralism. It should be done in consultation with the Palestinians."
But Sharon and the Bush administration insist the Israelis have no Palestinian partner to negotiate with, since Arafat has shown himself to be either unwilling or unable to crack down on militants in his midst.
Instead, Israeli officials describe the Sharon plan as a "parking place" until a new Palestinian leadership emerges. Palestinians fear it will solidify Israel's hold over parts of the West Bank that they claim as part of a future state.
Even though they see no negotiations in prospect, U.S. officials don't want the plan to jeopardize any future two-state solution or the "road map" for peace endorsed last year by the United States, Europe, Russia and the United Nations.
"We still stand behind the road map, but we're open to discussing ideas that might lead to improving the situation on the ground," a U.S. official said. The Sharon plan "is being viewed in a way that would be complementary. It's not either-or."
Sharon is intent on winning Bush's endorsement, in part because he needs Bush to enlist cooperation from Europe and moderate Arab states in helping to manage the aftermath of a pullout from Gaza. Israel wants Egypt, for instance, to prevent the smuggling of cash and weapons into the Gaza Strip. Europe exerts some leverage over the Palestinians because of its heavy subsidies.
So far, however, Europe and the Arab states have not played a major role in the discussions, and Egypt's Fahmy warned that if there are no negotiations planned or under way, "we would be inclined to be negative towards it."
A number of analysts say that rather than merely trying to help shape Sharon's plan, the Bush administration needs to assume a stronger role in making sure it doesn't make things worse and at least helps set the stage for future peace talks.
Martin Indyk, ambassador to Israel under President Bill Clinton, said the United States could lead an international move to reform the Palestinian Authority or even put the Authority in "receivership," with its powers assumed by the international community and backed by NATO.