JERUSALEM – Israel’s finance minister and Prime Minister Sharon’s chief political rival, Benjamin Netanyahu, abruptly resigned his Cabinet post yesterday in a final-hour protest over Israel’s planned withdrawal from the Gaza Strip and four Jewish settlements in the West Bank.

Mr. Netanyahu’s resignation, submitted during the weekly cabinet meeting, will have no practical effect on Mr. Sharon’s plan to begin evacuating Israeli settlements and military installations in Gaza on August 15. But the timing of the resignation highlighted the bitter political contest between the two men for the leadership of the Likud Party in the run-up to general elections that must be held before the end of next year.

Mr. Netanyahu submitted his resignation and walked out of the Cabinet room moments before the first of several procedural votes formally setting the evacuation plan in motion. By a vote of 17 to 5, the Cabinet then authorized the Israeli army to evacuate the first group of Gaza settlers, roughly 1,200 people in the isolated enclaves of Netzarim, Kfar Darom, and Morag, where military officials expect some resistance.

“We have reached the moment of truth today,” Mr. Netanyahu wrote in the letter announcing his resignation, which takes effect in 48 hours. “There is a way to achieve peace and security, but a unilateral withdrawal under fire and with nothing in return is certainly not the way.”

Mr. Sharon has pushed the Gaza evacuation despite stiff opposition from his Likud Party, which voted overwhelmingly against the plan last year in a nonbinding party referendum. The prime minister has argued that leaving the 21 Gaza settlements, where 8,500 Jewish residents live within fortified fences surrounded by 1.3 million Arabs, will improve Israel’s security and the long term viability of its Jewish majority.

In a news conference, Mr. Netanyahu said Mr. Sharon was continuing with the evacuation despite evidence that a “terror base” was being established in Gaza by radical Palestinian Arab groups such as Hamas and Islamic Jihad opposed to Israel’s right to exist.

“This is happening against all the warnings,” Mr. Netanyahu said. “I can do nothing about this from the inside, so I’ll leave.”

Mr. Netanyahu compared the evacuation to the 1993 Oslo accords, which he has criticized for failing to adequately ensure Israel’s security while giving the Palestinian Arabs autonomy over some parts of the occupied territories. He suggested that the Gaza withdrawal, which Mr. Sharon is undertaking without receiving concessions from the Palestinian Arab leadership, is rewarding the attacks against Israel that have occurred since the most recent uprising began in September 2000.

In a statement, Mr. Sharon said only that the government intended to push ahead with its current economic plan despite the finance minister’s resignation. Hours later Mr. Sharon named a vice prime minister and Likud member, Ehud Olmert, to replace Mr. Netanyahu as finance minister.

Mr. Netanyahu, who served as prime minister from 1996 until losing the general elections in 1999, has been perhaps the Likud Party’s most vocal critic of the plan. But his inconsistent position has angered many party loyalists, whose support he will need to successfully challenge Mr. Sharon for the party leadership once the Gaza evacuation is carried out.

Over the past year, Mr. Netanyahu has cast several Cabinet votes in favor of the withdrawal plan, known as disengagement. At the same time, much to the chagrin of Mr. Sharon, he has tried to derail the evacuation in Israel’s parliament, the Knesset, by backing calls for delaying the evacuation and supporting a public referendum on its merits.

“Netanyahu is a genius politically,” a conservative member of the Likud Party’s central committee, Gideon Ariel, said. “I hope that the other ministers who say they are against the expulsion will now follow suit. Netanyahu made it very clear that it’s impossible to stay in this government if you favor expelling Jews from their homes.”

Israeli political analysts said the departure is part of a broader realignment of Israel’s political parties in the coming months precipitated by Mr. Sharon’s disengagement plan.

Increasingly, Israel’s political alliances appear to be forming along generational lines with men like Mr. Sharon and the leader of the rival Labor Party, Shimon Peres, clashing with younger leaders like Mr. Netanyahu over Israel’s future boundaries and relationship with the Palestinians. Messrs. Sharon and Peres, who are old friends, have been involved in public life here since before Israel’s creation nearly six decades ago.

In proposing a unilateral withdrawal from Gaza, Mr. Sharon tacked away from his traditional supporters among the Likud’s hard line. The vice prime minister, Mr. Peres, also alienated some members of his own party by backing Mr. Sharon and joining his government even though the Labor Party favors the disengagement plan.

Many political analysts are predicting a split within Likud following the disengagement, with Mr. Netanyahu leading one wing and Mr. Sharon another. In what political analysts and party operatives describe as the “big bang,” Messrs. Sharon and Peres would then form a new movement, joined by the leader of the centrist, secular Shinui Party, Yosef Lapid. The result could be a majority coalition in the 120-seat Knesset.

Although Mr. Sharon gave Mr. Netanyahu generally high marks for his work as finance minister – traditionally a politically thankless post because of the budget cutting involved – government figures due out in the coming days are expected to show an increase in the number of Israelis living below the poverty line. The government is also scheduled to introduce a relatively austere budget for next year in the next few days, drafted largely by Mr. Netanyahu’s ministry.