The possibility of an election boycott by Israel's Arab minority grew stronger Wednesday after a parliamentary committee banned an Arab party and its leader from running in the Jan. 28 vote.

The panel, which is dominated by Prime Minister Ariel Sharon's right-wing allies, ruled early Wednesday to ban Azmi Bishara and his Balad party from the election. Just 24 hours earlier, it barred another Arab lawmaker from running.

The committee claimed both men support militant activity against Israel. The two legislators deny the allegations and have appealed to the Supreme Court.

Meanwhile, in a burgeoning election scandal threatening to envelop his hardline Likud party, Sharon fired Deputy Infrastructure Minister Naomi Blumenthal after she refused to answer police questions about allegations that she was part of a vote-buying scam.

Israel's high court will make a final ruling next week on whether the two Israeli Arabs are eligible to run. It will also decide whether an extreme right-winger, Baruch Marzel, who supports the outlawed Kach movement, can stand as a candidate — something already approved by the committee.

Bishara has predicted that if his party is banned, more than 50 percent of Arab voters would refrain from the ballot, a move that could deal a further blow to the opposition Labor Party, whose electoral chances have been badly hurt by more than two years of Israeli-Palestinian fighting.

The Arab minority, which traditionally votes for left-wing candidates, constitutes one-fifth of the electorate. A boycott would likely make it easier for Sharon, who leads in opinion polls, to win the election and form a coalition that supports his hardline military measures against Palestinians in the West Bank and Gaza Strip.

"If now they say we can't run in [these] elections, next they will say we can't vote," Bishara told The Associated Press. "Israel has to make up it's mind: either it's a liberal democracy or an apartheid state."

Jamal Zachalka, a senior member of the party, said Arab voters would protest the decision.

"Every person who has a head on his shoulders knows that it will have serious consequences. I don't think anyone expected it to pass quietly," Zachalka told Israel's Army Radio.

Saed Kashua, a prominent Israeli Arab author, said the panel's decision further adds to the minority's grievances and a general feeling that they are "an oppressed minority that is being discriminated against."

Many Israeli Arabs, disappointed by the collapse of peace process and increasingly marginalized by the violence, will likely follow Bishara's lead if he calls for a boycott, he added.

Although the scandal engulfing the Likud has cut into its lead in polls, it has not hurt the party enough to put it in serious danger of losing the election.

Blumenthal, the highest-ranking official to be called in for police questioning, invoked her right to remain silent when she was interrogated Sunday. A longtime Likud legislator, she retains her ninth spot on the party's list for the January balloting, assuring her re-election unless she decides to step aside.

Sharon has said any Likud member tainted by the scandal will be booted out of the party, but he has no legal authority to alter the candidate list.