CAIRO Egypt's leading Islamist group said on Wednesday that Israeli Prime Minister Ariel Sharon was winning his confrontation with Palestinians because Arabs had ruled out a war with the Jewish state.

"The worst form of war is that in which the enemy wins without a battle. The war criminal Sharon has won the first round because we ruled out the option of war whatever happens," the Muslim Brotherhood said in a statement as carried by Reuters.

A Palestinian uprising against Israeli occupation in the West Bank and Gaza Strip erupted after Sharon, who took power in March, visited a Bait-ul-Moqaddas shrine sacred to Muslims and Jews. Peace talks were deadlocked at the time.

"(Arab) rulers should review their choices anew, so let us rely on the option of resistance and endurance ... and prepare for this expected day (of war)," said the Brotherhood statement, issued to mark the Palestinian "nakba" on May 15.

Palestinians mark the birth of Israel on May 15, 1948, as their "nakba", or catastrophe. Some 700,000 Palestinians left or were forced to flee their homes in the fighting that followed the declaration of the Jewish state.

Though banned in Egypt, where it seeks to implement Islamic Sharia law by peaceful means, the Muslim Brotherhood is Egypt's largest and most influential group.

Founded in 1928, the Brotherhood is regarded as the godfather of Islamist groups in the Muslim world.