But the strong showing of Moshe Feiglin, a radical right-wing rival for the party leadership, who won almost a quarter of the Likud vote, could seriously hurt the former prime minister's chances in the national arena.
The calculation is simple: To regain the premiership, Netanyahu needs to take votes from the center of the political spectrum. But Feiglin's brash anti-Arab and anti-liberal stance could frighten the centrists away.
Netanyahu's strategy in the face of the "Feiglin problem" is two-pronged: He is seeking ways to eject Feiglin from the party or at least to sideline him and his extremist Jewish Leadership group; at the same time, he is trying to forge high-profile political alliances with moderates, like former finance minister Dan Meridor.
Whether the Likud is identified with Feiglin or with Meridor could make all the difference in the next election.
Netanyahu won the party leadership election with 73.2 percent of the vote, followed by Feiglin with 23.4 percent and Dani Danon, chairman of world Likud, with 3.4 percent. In his victory speech, Netanyahu made clear that he saw the results as a stepping stone to the premiership.
"Tonight the internal contest is ended, and, as of tomorrow, we will focus our efforts on bringing a new leadership to Israel," he declared.
But the fact that one in every four Likud voters backed Feiglin means the internal contest is far from over.
If Feiglin is able to control a large segment of the party, the Likud will be forced much further to the right than Netanyahu would like. The end result would likely be a party with a radical right-wing image uncomfortable for most Israelis and, more importantly, a new internal balance of power in which party leaders and Knesset hopefuls would have to deal with and in some cases defer to Feiglin and his extremist ideology.
"If people need Feiglin's votes to get into the Knesset, the Likud leadership will start speaking Feiglinish. And if it speaks Feiglinish, that will reduce Netanyahu's chances of being prime minister," wrote Nahum Barnea, senior political analyst for the mass circulation daily Yediot Achronot.
Feiglin burst onto the political scene in the mid-1990s as one of the leaders of Zo Artzeinu [This is OUR Land], a protest group determined to block the Oslo accords. One of his tactics was to stage mass sit-ins on major Israeli highways, bringing traffic to a stop across the nation. He was arrested and convicted of sedition, for which he spent six months in jail. In 1998, after then-prime minister Netanyahu signed the Wye River agreements with the Palestinians, ostensibly continuing the Oslo process, Feiglin formed Jewish Leadership, which advocates holding on to all the land of Israel, encouraging non-Jews to emigrate, denying Arabs the right to serve in Parliament, weakening the Supreme Court, pulling Israel out of the United Nations, establishing a leadership of religious believers and creating a "more Jewish" Israel. Feiglin called it a profound expression of the Jewish spirit; his critics denounced it as a form of Jewish fascism.
In 1999, Feiglin played his masterstroke: the movement's members, nearly all Orthodox settlers, joined the Likud en bloc. Aware that an extremist movement of the type he led stood no chance on its own, Feiglin planned to take over a large established right-tending Israeli party from the inside. If successful, he argued, he could even become prime minister.
His progress has been rapid: In the 2002 leadership primary, he polled only 3 percent of the party vote; in 2005, 13 percent; and, now in 2007, more than 23 percent. Many concerned Likudniks have likened Feiglin's activities in the party to a "hostile takeover."
Netanyahu is well aware of the danger. A few years ago, he was not averse to making deals with Feiglin to embarrass then-party leader Ariel Sharon. Now he is doing all he can to keep the right-wing radicals at arm's length. During his victory speech he gave orders to keep Feiglin and his supporters out of the hall.
Likud authorities have tried to clip Feiglin's wings in the past. In the run-up to the last Knesset election, they passed a regulation to prevent him from appearing on the party's Knesset slate. It stated that anyone who had spent time in jail in the past seven years could not run on the party ticket. Feiglin's jail term for his Zo Artzeinu activities ruled him out. Now Netanyahu is looking for legal grounds to expel Feiglin and the entire Jewish Leadership group. One possibility would be their support for Israeli soldiers refusing to evacuate settlers, which contradicts the Likud's blanket opposition to refusal. Another is the fact that in the last Knesset election many of the Jewish Leadership people, although registered members of the Likud, did not vote Likud. In some predominantly Jewish Leadership settlements with well over a hundred Likud members, only a handful actually voted for the party.
The Likud, badly hurt by Sharon's breakaway to form the centrist Kadima Party in November 2005, won only 12 Knesset seats in the March 2006 Knesset election. But a number of major developments that year restored the Likud's political fortunes: the rocket fire on nearby Israeli towns and villages following the withdrawal from Gaza; the eventual takeover of Gaza by Hamas; and Olmert's poor performance in last summer's war with the Hezbollah in Lebanon. All three developments served to undermine Kadima and make Netanyahu the favorite to win the next election.
That is until Ehud Barak's election as Labor Party leader in July and Feiglin's high-profile performance in the subsequent Likud vote. Where a few months ago polls had Netanyahu well ahead of any rival for prime minister, now he trails both Barak and Foreign Minister Tzippi Livni, should she take over from Olmert as Kadima leader. In a three-way race, a recent poll had Barak at 32 percent, Netanyahu at 30 percent and Olmert finishing last with just 5 percent. But if Livni becomes the Kadima candidate, she polls 29 percent, with Barak and Netanyahu both trailing at 24 percent.
What these figures show is the vital importance of the centrist vote. And if Netanyahu hopes to win his way back into the prime minister's office, he will have to find a way to get free of Feiglin.
Leslie Susser is diplomatic correspondent for the Jerusalem Report.