Sharon is considering defaulting to a US plan that calls for full withdrawal from Gaza (including the Philadelphi route - the border between Gaza and Egypt) and from some parts of the West Bank. There're legitimate reasons to withdraw from all of Gaza (as opposed to annexing three settlements in the North), but Sharon and the U.S. are pushing the worst one - getting international approval! If the withdrawal from Lebanon taught us anything, it's that Israel can live up to the spirit and the letter of every single international obligation, and the Arabs will still demand more and refuse to give it any peace. Even the thinnest of pretexts (the Sheba Farms) will be enough to get Europe to intervene "even-handedly" to "calm tensions."
Withdraw from Gaza, and the Palestinians will demand about the West Bank. Withdraw from the West Bank, and the Palestinians will demand Jerusalem. Withdraw from Jerusalem, and the Palestinians will demand scattered Arab villages within the Green Line. Withdraw from scattered Arab villages within the Green Line, and the Arabs will demand Tel Aviv. And they'll keep killing Jews and "destabilizing the region" until Europe pressures Israel to give them what they want.
So making decisions based on trying to rally international support is pretty stupid - that support will never be forthcoming. Sharon should do what's in Israel's best military interest, and the rest will work itself out.