THE DEFECTION of the left-leaning Labor Party from Israel's unity government leaves Prime Minister Ariel Sharon with few options to remain in power. The decision Mr. Sharon makes can have only two outcomes: an even harsher stand against Palestinians in Israel's 2-year-old war with terrorist factions or an opportunity for Israelis to decide whether a new government offers more hope for the future.

If Mr. Sharon opts for governing with a narrow majority, he will have to rely on ultraright and nationalist parties to remain in power. Both have consistently demanded tougher actions against Palestinian militants who are engaged in a daily struggle with Israel defense forces.

The Israeli army currently occupies most Palestinian cities on the West Bank. That strategy has kept Palestinians virtual prisoners in their homes, villages and cities. Military strikes to eliminate terrorist leaders often have resulted in civilian deaths. Those actions are unlikely to change under Shaul Mofaz, the former army chief of staff whom Mr. Sharon has tapped for the post of defense minister. Mr. Mofaz was at the helm of Israel's military operations when the present conflict began in the fall of 2000. He resigned just last summer.

Although Israel must defend itself against terrorist acts, the military campaign of the past two years has brought neither peace nor security to the nation. The death toll among Israelis has continued to rise. The economy is in deep decline, and Israel's reputation around the globe is under siege.

Mr. Sharon has offered little in the way of diplomatic efforts to resolve the situation. Diplomacy will be even less a priority with ultraconservatives and nationalists in the Cabinet. The presence of the Labor Party in the government never moved the retired general toward a peaceful solution of the crisis, but it did serve as a mediating force in times of crisis. The U.S.-backed peace plan that American envoy William Burns shopped in the region recently requires concessions of Israel (as well as the Palestinians) that an ultraconservative government led by Mr. Sharon just won't accept. A freeze on Jewish settlements in areas populated by Palestinians tops that list.

Trying to govern with a narrow majority would leave Mr. Sharon vulnerable to right-leaning coalition partners and votes of no confidence. New elections, however, would give the Israeli public an opportunity to voice its opinion on the path taken by Mr. Sharon in the past 20 months. Do Israelis want to continue to fight their way out of this conflict? Or do they want their prime minister and government leaders to progress on a dual track, to combat terrorism and pursue diplomacy?

A peaceful end to this conflict also requires significant changes by the Palestinians. Palestinian leader Yasser Arafat has yet to deliver on much-needed reforms, and his new Cabinet doesn't inspire confidence that serious reform will be forthcoming. New elections in the Palestinian territories have been set for early next year, but a serious challenge to Mr. Arafat's incumbency seems unlikely despite his poor leadership and corrupt government.

The stalemate in the present situation calls for the electorate on both sides of this conflict to speak out on their future. Too many lives are being lost to continue with the status quo.