Netanyahu faced a relatively strong challenge from Moshe Feiglin, a radical West Bank settler, whose performance in Tuesday's primary could help shore up the extreme right wing of the party and hurt Netanyahu's efforts to rehabilitate Likud after it was battered in national elections last year.
Recent polls have crowned Netanyahu, Likud's leader since late 2005, as the front-runner for Israel's top job.
Netanyahu captured 73 percent of the vote to Feiglin's 23 percent, according to final results party officials released early Wednesday. A third candidate, Danny Danon, trailed with 3.5 percent.
Netanyahu's victory was a foregone conclusion after he announced the elections on short notice, eliminating a run by his chief internal rival, former Foreign Minister Silvan Shalom, who said he didn't have enough time to campaign.
In his victory speech, Netanyahu made it clear that the race was a dress rehearsal for a much bigger contest.
"Tonight the internal contest ended, and as of tomorrow, we will focus our efforts on bringing a new leadership to Israel," Netanyahu told dozens of cheering supporters.
A telegenic politician and self-described hawk, the M.I.T.-educated Netanyahu speaks flawless, American-accented English. He's tough on defense issues and hands-off on the economy, but in recent months has been trying to position himself in the political center to try to lure moderate voters.
"It's clear that Netanyahu is a right-wing man, but a right-wing man who is always winking at the center," political commentator Hanan Crystal said Tuesday.
Feiglin's platform calls for barring Arabs from Israel's parliament, encouraging non-Jews to emigrate and pulling Israel out of the United Nations. He is viewed as extreme even by many Israeli settlers.
Israeli general elections are scheduled for 2010, but could be earlier if Prime Minister Ehud Olmert's fractious coalition government falls apart, or if Olmert himself — facing low poll numbers and a series of legal woes — leaves office. Current polls show Netanyahu's main rival would be the Labor Party's Ehud Barak, who unseated Netanyahu as prime minister in 1999.
With many Israelis on summer holiday, turnout among the nearly 100,000 Likud members was slightly under 40 percent. In an effort to encourage Likud members to vote, Netanyahu extended the polling until 11 p.m. and stationed ballot boxes at hotels around the country.
Though Feiglin counted on the support of only 10 percent of Likud's members, he stood to win as much as 30 percent of the vote because of pro-Netanyahu no-shows, Crystal said before the polls closed.
That level of support "would brand the Likud as negative, reactionary, and delusional, which would play into the hands of its political rivals," commentator Yossi Verter wrote Tuesday in the Haaretz daily.
Security guards barred Feiglin and his supporters from entering the hall where Netanyahu delivered his victory speech. Crystal interpreted this as a sign of what Netanyahu had in store for the party's radical faction now that the primary race was over.
"Whoever doesn't let Feiglin into the hall apparently intends to throw him and his supporters out of the Likud," Crystal said. "Let's see if he succeeds."
Likud dominated Israeli politics for nearly three decades until 2005, when party leader Ariel Sharon bolted to form the centrist Kadima, taking top Likud legislators with him. Sharon was incapacitated by a stroke in early 2006 and replaced by Olmert, another former Likud politician who led Kadima to victory in elections several months later.
Likud fell apart in that vote, shrinking to 12 seats in Israel's 120-seat parliament from 38 in the previous elections in 2003.
But Netanyahu's hawkish policies appear to have gained renewed popularity with an Israeli public frustrated by ongoing rocket fire from the Gaza Strip and angry over the country's inconclusive war against Hezbollah guerrillas in Lebanon last summer.
Netanyahu was a vocal opponent of Israeli-Palestinian peace deals in the early 1990s, but later, as prime minister from 1996 to 1999, he negotiated two interim peace deals and handed over most of the West Bank town of Hebron to the Palestinian Authority.
Still, his relations with the Palestinians were acrimonious and his ties with the Clinton administration, which wanted to see more Israeli flexibility, were often strained. His shaky coalition government fell apart in 1999, and he was defeated by Barak in elections that year.
After his defeat, he resigned as Likud's chairman and left politics for three years before returning as foreign minister and finance minister under Sharon. He quit the Cabinet two weeks before Israel's 2005 withdrawal from the Gaza Strip to protest the pullout, taking Likud into the opposition.
The author of several books on terrorism and Israeli policy, Netanyahu is the son of a hardline Zionist ideologue and the brother of one of Israel's most famous war heroes — Yoni Netanyahu, who died commanding Israel's legendary hostage rescue at Entebbe, Uganda, in 1976.