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* Sharon's influence infuses Israeli-Palestinian peace talks
* A staunch hawk, his withdrawal from Gaza changed history
* Supporters question if future leaders will have same clout
By Crispian Balmer
JERUSALEM, Jan 11 (Reuters) - As Israel prepares to bury former Prime Minister Ariel Sharon, it might also be saying goodbye to the last man capable of enacting the sort of tough decisions needed to secure peace with the Palestinians.
Eight years after a stroke pitched him into a coma, Israelis and Palestinians continue to grope for a deal in terms bequeathed by Sharon, a war hero at home and a war criminal to Arabs, a hawkish prophet of settlement on occupied land who dramatically gave up Gaza in what he called a bid for peace.
Prime Minister Benjamin Netanyahu, who replaced Sharon as head of the right-wing Likud when the party rebelled in 2005 against the withdrawal of settlers from the Gaza Strip, has since endorsed relinquishing land for peace, in principle - a minimal condition for any accord with the Palestinians.
Surveys show as many as two Israelis in three could accept a Palestinian state in the West Bank and Gaza, on lines first promoted after U.S.-brokered talks by left-wing, Labour leaders - notably Yitzhak Rabin, another war hero, who was assassinated by a fellow Israeli in 1995 for offering to end the occupation.
But Netanyahu's current struggles to run a coalition that includes hardliners who oppose giving up any territory suggest Israel lacks a leader with "Bulldozer" Sharon's credentials to persuade, or bully, settlers to quit most of the West Bank.
As housing minister in the 1990s, Sharon was behind many Jewish settlements that dot the West Bank, which was captured in the 1967 war. The security barrier he ordered to be built in 2005 is still under construction through occupied land. His uncompromising vision of Israeli security remains in place.
Yet at the same time, his shock move to drag Israeli settlers - in some cases literally - from the Gaza Strip showed to many that Israel could roll back its occupation, given sufficiently robust leadership.
"His defeat of the settlers might be the most important aspect of his legacy," said David Landau, the former editor of the liberal newspaper Haaretz, whose biography of Sharon, "Arik", is due to be published later this month.
"Before the Gaza disengagement there was serious apprehension that the settlers might be able to prevent a government from doing what it wanted. ... The memory of what happened leaves intelligent people here to have confidence and conviction that the state is ultimately the main power."
However, Sharon, who died on Saturday aged 85, had unique standing within Israel that helped him drive through change by dint of his personality - a decorated soldier who played a decisive role in every war since Israel's founding in 1948.
He was reviled in the Arab world, particularly for his role in the 1982 refugee camp massacres in Beirut following Israel's invasion of Lebanon. But his superhawk image gave him a stature at home that successors could not match.
"Sharon was the last leader of the 1948 generation with a long, illustrious military career. He had the moral authority needed to push through very painful decisions," said Raanan Gissin, who was a senior aide to Sharon.
"We don't have those sort of people around today."
When illness felled him, Sharon was on course to win an imminent general election and although he himself categorically denied it at the time, aides say he had been planning further unilateral withdrawals from the West Bank.
"We would have started taking certain measures in the West Bank under a project known as the realignment plan," said Dov Weisglass, chief of staff when Sharon was prime minister.
"If Sharon had stayed well, we would be closer to peace today. No question."
Weisglass was famously quoted in 2004 saying the unilateral withdrawal from Gaza was a way to "freeze" bilateral talks with the Palestinians, though he later said peace remained the goal.
Palestinians ridicule the idea of Sharon as a peacemaker. They remember him as a ruthless tactician and blame him for sparking the second Palestinian Intifada (uprising) with a provocative visit to Jerusalem's al Aqsa mosque plaza in 2000.
When the evacuated Gaza Strip became an arena for faction-fighting and Hamas Islamist rule, hobbling their negotiators, many Palestinians saw that paralysis as part of Sharon's plan.
"He was instrumental in the expansion of settlements and the Gaza disengagement was just meant to consolidate the Israeli occupation of the West Bank," said Ghassan Khatib, an academic and former Palestinian minister.
"In all his history, he played a negative role here."
Israeli analysts say Sharon's about-turn on Gaza showed he had realised the occupation represented a long-term threat to the Jewish state and had to be wound down. His deputy, Ehud Olmert, forged ahead enthusiastically with the peace process when he took over as prime minister, and ended up offering the Palestinians more concessions than any Israeli before him.
But two years later a corruption scandal cost Olmert his job and any immediate prospects of a deal disappeared with him.
When Likud won an election in early 2009, Netanyahu apparently persuaded Washington that the starting point for renewed talks should not be the unofficial Olmert offer.
Instead, the reference point was a document given to Sharon in 2004 by U.S. President George W. Bush. Crucially, it said "new realities on the ground" had to be taken into account - a clear nod to Israel's ever-expanding Jewish settlements.
"Sharon got these letters from Bush which clearly envisaged the settlement blocs would remain part of Israel," said Sharon biographer Landau.
"He considered this as his major success as prime minister."
However, even if the big blocs stay a part of Israel in a future accord, many settlers would find themselves marooned in Palestine - and that could prove an insurmountable problem.
In 2004, the number of such settlers was put at 50,000. Today, unofficial tallies suggest the figure might be more than 150,000 of the half million or so Israelis living in the occupied West Bank and East Jerusalem. This compares to just 9,000 who were hauled out of the Gaza Strip.
The settler movement was bruised by the Gaza pullout, but it has since regrouped and bolstered its numbers.
Some militant settlers have taken to damaging Arab property in attacks they call "price tagging" for any concessions by Netanyahu's government, while the group's political leaders have racheted up the their influence within the establishment.
This is especially true in Likud, where settlers play a crucial role in the selection of parliamentary candidates and helped oust leading moderates from the party ticket ahead of the last general election early in 2013.
Political commentators question whether Netanyahu might eventually have to "do a Sharon" and quit Likud himself, knowing that most of his party is opposed to the contours of the long-mooted peace deal. However, only two or three of his party's 20 parliamentarians have publicly backed the two-state solution, suggesting that if he did quit, few would follow him.
Netanyahu himself did not follow Sharon out of Likud in 2005, branding the Gaza withdrawal "evil", and there is much scepticism in the media about how far he is prepared to go this time around to secure peace. But if he cannot, or will not, go all the way, there are no plausible alternatives at present.
"Looking around, I don't see the sort of charismatic leaders with the kind of credentials that Sharon had," said Uri Dromi, who was a spokesman for slain prime minister Rabin.
"Not the sort of people who could make the bold moves needed for peace, while at the same time being able to convince Israelis that they weren't being sold cheap to the Arabs." (Editing by Alastair Macdonald)