His chief surgeon, Felix Umansky, remains optimistic however saying "He can still pull through. I don't know if that will happen 100 per cent, but I hope so."
The surgical professor added "He is doing better. We need to wait two or three days. We are going to do another scan and if there are no other problems we will start to bring him out of the coma."
Shlomo Moryussef, director of the Hadassah hospital where Mr Sharon is lying in a medically-induced coma, told reporters that some of the blood clots which remained from the two previous rounds of surgery had been removed.
The goal of the sedation is to lower the oxygen needs of the brain and to allow the brain to rest.
"Compared to previous scans I can say that there is a significant improvement" in Mr Sharon's brain, he said. "There is no more active bleeding and the intra cranial pressure has returned to normal.”
"Even though the result of the CT (computed tomography) scans are better than yesterday the condition is still critical," he added.
Mr Sharon, 77, who has been prime minister since February 2001, had already undergone seven hours of surgery on Wednesday night after suffering a massive stroke.
Political fallout
Before the stroke Mr Sharon and his new Kadima party seemed a shoo-in for a March 28 election but even his closest allies now acknowledge he is unlikely to ever return to office.
Doctors have privately said he may well have suffered irreversible brain damage.
Even the Palestinian Prime Minister, Ahmed Qorei, has acknowledged that the loss of Mr Sharon, the one-time hawk who pulled Jews out of the occupied Gaza Strip, would leave a "big vacuum".
The Jerusalem Post said "Ours is a changed and uncertain country without him at its helm, and many Israelis feel thoroughly bereft without his massive overwhelming presence."
For the moment at least, officials have said the election will go ahead as planned in three months' time.
Deputy Prime Minister and Finance Minister, Ehud Olmert, has been named acting prime minister in accordance with the law.
In the event of Mr Sharon dying or being permanently incapacitated, however, Mr Olmert's temporary appointment will have to be approved in a cabinet vote.
Mr Olmert has held talks with former Labour prime minister and Sharon ally, Shimon Peres, amid speculation that he would ask him to rejoin the government as an elder statesmen in the absence of Mr Sharon.
Opinion polls have so far shown Kadima's support largely holding up, despite the uncertainty surrounding the health of its leader.
Mr Sharon's illness also cuts across rising chaos in the West Bank and Gaza
Strip ahead of a January 25 Palestinian legislative election which will also have far-reaching consequences for the peace process.
Rice cancels visit
Reflecting Washington's concern about the situation, US Secretary of State Condoleezza Rice has cancelled a scheduled trip to Australia and Indonesia to keep watch on Mr Sharon's fight for life.
"She decided because of the situation in the Middle East, it was the right decision to stay here in Washington," said State Department spokesman, Sean McCormack.
If Mr Sharon were to die, Condoleezza Rice would probably attend the funeral in Jerusalem, although Mr McCormack did not mention that possibility.
US officials have been careful not to publicly predict that Mr Sharon will not return to power.
Ms Rice spoke by phone with Israel's acting prime minister, Ehud Olmert, Mr McCormack said. It was their first conversation since Mr Sharon's health crisis.
The secretary of state also spoke today to Australian Foreign Minister Alexander Downer, and the two discussed rescheduling her visit for March, the spokesman said.
In Australia, Ms Rice had planned to participate in the first Asia Pacific Partnership on Clean Development and Climate with officials from Australia, China, India, Japan and South Korea.
In Indonesia, Ms Rice had planned to meet with President Susilo Bambang Yudhoyono to discuss the country's democratic development, the fight against bird flu and Indonesia's recovery from the 2004 tsunami.