JERUSALEM (AP) - Prime Minister Ariel Sharon's narrow defeat of a challenge within his Likud Party gave him time to decide his political future, but he may still bolt the party if it refuses to support his political program, an adviser said Yesterday.

Israel pressed ahead Yesterday with its offensive against Palestinian militants yesterday and Defense Minister Shaul Mofaz said the army would attack them relentlessly to force them to stop firing rockets at Israeli towns.

Tensions in the region were further inflamed when Hamas militants released a video of a bound and blindfolded Israeli businessman who they had kidnapped and later killed - an attack that appeared to signal a new tactic in the militants' fight against Israel.

The flare-up in violence had been expected to harm Sharon's chances in Monday's vote in the Likud central committee, where party hard-liners hoped to punish Sharon for his withdrawal from the Gaza Strip.

Sharon prevailed with a slim margin. His allies had said that if he lost, he might leave Likud, call early elections and run as head of a new centrist party.

Sharon might still bolt the party if it refuses to back his major policies, said Lior Horev, Sharon's political adviser.

"Either the party stands behind him, or he has to choose a different way in order to push forward his agenda," Horev said.

Sharon's main rival, Benjamin Netanyahu, insisted he would prevail in party primaries next year by tapping into the deep vein of anger among party members who feel the prime minister betrayed Likud's nationalist roots.

Foreign Minister Silvan Shalom, who backed Sharon in the vote, said he advised the prime minister to work to heal the bitter divisions in the party.

"Today everything needs to be done to unite the ranks," Shalom told Israel TV. "It's crucial to try to keep everyone together."

Renewed fighting with the Palestinians in Gaza over the past week has compounded Sharon's political problems. Hamas militants launched dozens of homemade Qassam rockets at southern Israel over the weekend, prompting a major Israeli offensive, marked by airstrikes in Gaza and arrest raids in the West Bank.

Israel fired live artillery shells into the northern Gaza Strip on yesterday in what Israeli security officials said was a symbolic act to warn Palestinian militants to halt their attacks on Israelis.