The action came after Mr. Sharon made his most sweeping statement about the need to compromise for peace, telling an Israeli newspaper, "The moment has arrived to divide this tract of land between us and the Palestinians."

The two sides remain deeply at odds over how to put the plan into practice. But Israel's decision, following the creation last month of a new Palestinian government led by Mahmoud Abbas, showed that a peace effort viewed with cynicism and suspicion on both sides was nevertheless gaining traction, prodded by President Bush.

The Israeli action opens the way for a second meeting between Mr. Sharon and Mr. Abbas this week, officials said, and for a three-way summit meeting with President Bush early next month.

The Israeli decision also indicated the extent to which the idea of Palestinian statehood, once confined to the radical left, has penetrated the Israeli mainstream — even as the society has swung to the right on other matters during almost 32 months of conflict. 

The new plan is far more explicit about its overall goals and ambitious about reaching them than the Oslo accords of 10 years ago. It calls for achieving in just three years a comprehensive Arab-Israeli peace and a sovereign state of Palestine in the West Bank and Gaza Strip, which Israel occupied in the 1967 war. The state's borders are to be negotiated.

"I have not hidden my position on the issue of the future Palestinian state," Mr. Sharon, 75, told the newspaper Yediot Ahronot. "I am no less connected to those tracts of land that we will be forced to leave in time than any of those who speak loftily. But you have to be realistic, what can and what cannot stay in our hands." 

Mr. Sharon envisions parting with far less land, over a much longer time, than the Palestinians would like, his associates say. He reluctantly sought approval of the peace plan after the United States rebuffed his demand to first make significant changes, saying it would "fully and seriously" address Israel's reservations as the plan moved ahead.

The White House called Israel's decision today "an important step forward." Palestinian officials welcomed it as well, while saying the plan should not be changed. 

On an Egyptian television broadcast on Saturday, Mr. Abbas said that the plan "must be accepted as it is, from A to Z."

The vote today was 12 in favor and 7 against, with 4 ministers abstaining, including a former prime minister, Benjamin Netanyahu. 

The government held a second vote to reject overwhelmingly the claim by Palestinians that refugees of the 1948 Arab-Israeli war have a right to return to what is now Israel. Mr. Sharon unsuccessfully sought to have the Palestinians yield that claim before he moved on the peace plan, which calls for resolution of the matter in the last of three phases. 

The vote on the right of return, together with pressure from the United States, prompted seven members of Mr. Sharon's Likud Party to join the five ministers from the centrist Shinui Party to support the peace plan.

"I think the document is not a good one, but we have to choose when we battle the U.S., and now is not the time," Ehud Olmert, a minister from Likud who voted for the plan, said in an Israel Radio broadcast. 

But Yisrael Katz, also of Likud, said, "I object to a Palestinian state being established," and voted against endorsing the plan.

As Mr. Sharon did on Friday, the Israeli government today accepted the individual steps of the plan, rather than the overall plan itself, indicating that it will continue to seek changes in the way the plan is carried out. But creating a Palestinian state — first with "provisional" borders, then with full sovereignty — is a central step. While Mr. Sharon had said previously that he accepted statehood as an inevitability, no Israeli government had done so.

The ministers resolved that all of Israel's proposed changes "will be implemented in full" as the plan is put into practice.

No one quit the governing coalition. Predicting that the plan would go nowhere, far-right ministers said they would have more influence over the negotiating process by remaining inside the government.

"We always say that what counts for us is the reality on the ground," Zevulun Orlev of the National Religious Party, which opposes Palestinian statehood, said on an Israeli television broadcast. "I am confident the chances of implementing the road map are very slim, since I do not see the Palestinians even beginning to implement the very tip of the plan."

Yuli Tamir, a leader of the left-of-center Labor Party, which is not in the government, hailed the decision. "Things that were taboo even 10 years ago, or five years ago, are now in very wide consensus," she said. But she voiced doubt about the plan's prospects, saying, "I think Sharon will place a lot a preconditions before he makes even the first move."

As its first step in the first phase, the plan calls for a statement from the Palestinians of an unconditional cease-fire, and a statement from the Israelis affirming a commitment to a two-state solution.

The Palestinians are supposed to confiscate illegal weapons and confront "all those engaged in terror," while the Israelis are supposed to dismantle immediately the dozens of settlement outposts built under Mr. Sharon, since March 2001.

According to the plan, those steps are to be taken "in parallel," but Mr. Sharon wants the Palestinians to crack down on extremists before Israel makes any concessions.

Israel says progress on the plan can be judged only according to performance, but Palestinians want the plan to proceed according to its timetable, which envisions the first phase ending in six months. Then, in a second phase, the Palestinians will form an independent state "with provisional borders and attributes of sovereignty" — a formulation that remains rather mysterious.

In the third phase, the two sides are to draw up final borders, resolving their disputes over Jerusalem and the right of return.

Mr. Sharon favors a long-term, interim agreement, rather than the plan's ambitious schedule, to achieve Palestinian statehood and Israeli-Arab peace. He may hope to adapt the plan to that strategy. Some of his associates have suggested that the second phase — provisional statehood — could last for many years.

Mr. Sharon, an architect of Israel's settler movement, was also one of the most aggressive military leaders, even before Israel was founded. He was once an advocate of retaining the West Bank and Gaza.

Yet he says he comes from a line of "pragmatic Zionists," and as prime minister, he has positioned himself in the political center. He angered many on the right by accepting a Palestinian state, albeit, in his vision, a small one with no army and with Israeli control of its borders and airspace.

"Israel accepted a plan that could very well lead to the establishment of a Palestinian state," said Dore Gold, an adviser to Mr. Sharon. "Nonetheless, it still insists on its right to defensible borders, and that any Palestinian state will not be a source of any future threat."

Shlomo Avineri, a political scientist at Hebrew University, said Mr. Sharon's shift reflected the primacy he placed on Israel's alliance with the United States.

"Sharon moved from the position of a general who thinks in terms of mountains to a statesman who thinks in terms of strategic alliances," he said. "It's not a softie position, but a position that tries to be realistic, pragmatic."

Like many experts on both sides, Mr. Avineri predicted failure for the plan, which he called "a wish list," because of the disagreement over how to act upon it. 

But in a sign of public longing for an end to the conflict, shares on the Tel Aviv stock exchange jumped more the 6 percent in heavy trading after the ministers voted.

In the interview published today in Yediot Ahronot, Mr. Sharon said of his decision to put the plan into action, "The decision I made is based on the recognition that the moment has come to cut, the moment has arrived to say `yes' to the Americans, the moment has arrived to divide this tract of land between us and the Palestinians."