TEL AVIV -- Prime Minister Ariel Sharon yesterday was cleared of allegations that he used his influence to help a real estate developer in return for large payments to Sharon's son Gilad. An indictment probably would have forced Sharon to resign.
Instead, the decision by Attorney General Menachem Mazuz gave a tremendous boost to Sharon's government, which was shaken deeply in recent weeks by dissension over the prime minister's proposals to remove Jewish settlements from the Gaza Strip and from northern sections of the West Bank. It is now virtually assured that preparations for the withdrawal will not be interrupted for at least four or five months.
Israeli media had been reporting for days that Mazuz would close the case without charging Sharon or his son, but there was widespread speculation that the investigation would reveal unseemly or borderline-illegal conduct on the part of the prime minister. None of the reports anticipated the sweeping exoneration.
Despite months of investigation and interrogation, ''the evidence does not even come close" to what would be required for a conviction in the so-called Greek island affair, Mazuz said. ''The investigation did not uncover incriminating findings against Sharon."
At the center of the case was an ambitious plan by real estate developer and longtime Sharon associate David Appel to develop a casino on a Greek island in the Mediterranean Sea. Some prosecutors and police officials alleged Appel paid large fees to Gilad Sharon, a consultant on the project, in return for his father's assistance in persuading the Greek government to approve the development.
The development proposal eventually was dropped because of the presence of antiquities and ancient graveyards on the proposed site.
''For many months, we have been reading reports that promised us a scandal, corruption that involved the prime minister, one of his sons, and leaders of the Likud Party," said Asa Kasher, a Tel Aviv University professor and ethics specialist. ''The press was fed by police, state prosecutors, and all kinds of political operators. Now, as we say in Hebrew, the mountain has given birth to a mouse, and a very small mouse at that. There is nothing that shows anything wrong, legally or morally."
Kasher pointed out that Mazuz determined Sharon was not foreign minister when Appel was seeking the Greek government's permission for the project in the late 1990s. He said Mazuz also found that Sharon made decisions against Appel's interests when Sharon was housing and infrastructure minister in an earlier government.
The practical effect of yesterday's decision, legal and political analysts agreed, was that it paved the way for Sharon to repair his ruling coalition and solidify what has so far been tenuous support within the government for withdrawing from some of the occupied territories.
Isaac Herzog, a leader of the opposition Labor Party in parliament, said the ''absolute, complete clean bill of health will put the wind at Sharon's back" and should enable the prime minister, with help from Labor, to maintain the current government until a three-month parliamentary recess begins Aug. 4.
''During this time, he will try to calm things and heal some of the wounds in his own party," Herzog said. At the end of the recess, Herzog said, Sharon would have three options: Call new elections, construct a national-unity government with Labor and the centrist Shinui Party, or build a new right-wing coalition with religious parties instead of nationalist factions.
He said Labor would continue its policy of the last two weeks of protecting Sharon from no-confidence votes ''because we want this disengagement" and are willing to shield Sharon ''as long as he is serious about disengagement and does not make large investments" in West Bank settlements.
Proposals to help the residents of Gaza settlements relocate to the West Bank are being floated in political circles, as are proposals to encourage them to relocate in the Negev region of southern Israel.
Kenneth Mann, who is Gilad Sharon's lawyer, said ''I am happy with the decision" in the Greek island case. He said that a second unrelated probe into whether Gilad Sharon and his brother Omri Sharon violated financial laws is still open.
Mazuz's ruling overturned a recommendation by former state prosecutor Edna Arbel, who is now a supreme court justice, that the Sharons be indicted. Mann said this reflected a deep split within the Israeli legal establishment over the circumstances in which politicians should be indicted.
Mazuz asserted strongly that a high probability of conviction should exist before anyone is indicted, and sharply criticized the way the Greek island case was handled while Arbel was in office. Arbel did not immediately comment on Mazuz's announcement.
''There was a goal at the outset which influenced the decision-making process," Mazuz said. ''I have a few of my own suspicions as to why the state prosecutor did this, but I imagine she will find the time to give her own version."
Charles A. Radin can be reached at email@example.com