BRUSSELS -- Belgium's highest court said Wednesday in a landmark ruling that Israeli Prime Minister Ariel Sharon can be sued for war crimes -- but only after he leaves office.

In an immediate reaction an Israeli official said Israel had recalled its ambassador to Belgium for "consultations" after the court ruling.

The ruling by the Cour de Cassation, the top appeal court, opened the way for several serving or ex-leaders around the world to be tried under a unique Belgian law that allows for war crimes prosecutions.

The court ruled that "international custom does not allow heads of government to be the subject of legal action in a foreign state".

But it overturned a ruling made in June 2002 by a lower court, which said that Belgium's "universal competence" law only applies if the alleged perpetrator is in Belgium.

The lower court's ruling halted one of the most high-profile suits brought under the law -- one filed against Sharon by 23 Palestinian survivors of a refugee camp massacre in Lebanon in 1982.

The top court's ruling thus cleared the way for Sharon to be tried in the massacre case once he ceases to be prime minister, regardless of whether he is in Belgium or not.

The unique "universal competence" law, adopted in 1993, enables Belgian courts to try cases of war crimes, crimes against humanity and genocide regardless of where the incidents occurred.

It has attracted numerous lawsuits brought by victims of alleged atrocities who one day may seek recourse in the fledgling international criminal court.

An Israeli official warned that the ruling could hurt bilateral relations with Belgium.

The massacre, during which between 800 and 2,000 Palestinian refugees were slaughtered in the Sabra and Shatila refugee camps, was carried out by an Israeli-allied Christian militia during Israel's war against Lebanon.

An Israeli tribunal in 1983 found Sharon, who was Israeli defence minister at the time, to be indirectly responsible for the carnage. Sharon was forced to resign.

The New York-based lobby group Human Rights Watch hailed the ruling, which came as a surprise to legal observers in Belgium.

"It's a huge victory not only for the victims of the Sabra and Shatila massacres but for all victims of grave crimes who have put their hopes in the Belgian law of universal competence," HRW's Reed Brody told AFP.

Under the Belgian law, four Rwandans were found guilty in 2001 of participating in the 1994 genocide in their homeland, which left an estimated one million people dead.

But last year's appeals court ruling effectively shelved suits brought under the law against some 30 foreign leaders or ex-leaders, including Sharon and Iraqi President Saddam Hussein.