Mr Sharon, 77, whose fate is crucial to Israel and the wider Middle East, remains in intensive care after suffering a massive brain haemorrhage last week, but medics indicated his condition is no longer life-threatening.
"The prime minister's condition is serious but there is no immediate danger to the prime minister's life," Mr Sharon's chief anaesthetist Yoram Weiss told reporters at Jerusalem's Hadassah hospital.
"In recent days there has been a significant change in the prime minister's condition but we still have a long way to go and we all have to be patient.
"Since yesterday the prime minister has been breathing spontaneously. He is on a respirator but he is the one who is operating the respirator," he said.
"We are gradually reducing the level of drugs being given and monitoring the various parameters including intra-cranial pressure to prevent any further damage being done," Dr Weiss added.
Israelis and world leaders have braced themselves for the end of the Sharon era, fearing his demise would spark new turmoil in a region struggling to find the path to peace after decades of conflict.
Left hand moved
The hospital's director, Shlomo Mor Yosef, told the news conference that Mr Sharon had moved his left hand for the first time and had managed to move his right arm more than in an initial stimulus test on Monday.
"The prime minister moved his right hand and right arm with bigger movement than yesterday. He also moved his left hand. These are neurological changes that show a slight progress in the brain function of the prime minister," Dr Mor Yosef said.
Medical authorities have said only the right-hand side of Mr Sharon's brain, which controls the left side of his body, was affected in the brain haemorrhage and the latest movement may indicate he has retained more brain function than first thought.
For days doctors have doubted Mr Sharon can again lead the country, leaving Israel staring into a political void just over two months before a general election, which the prime minister's new Kadima party had been tipped to win.
Dr Weiss was reluctant, however, to be drawn on Dr Sharon's long-term prospects or speculate whether his five-year premiership had effectively ended with his dramatic collapse and brain haemorrhage.
"I believe that all of us need to be patient," said the anaesthetist, saying doctors had not yet expressed either optimism or pessimism.
"We are not prophets."
In the week since Mr Sharon collapsed, Israelis have been glued to television and radio bulletins for hourly news of his health.
Reports said Mozart, one of Mr Sharon's favourite composers, has been played and his sense of smell stimulated with slow roasted meat, although there has been no sign that the prime minister has heard the music or sniffed the food.
Olmert urges unity
With the premier in intensive care, his stand-in Ehud Olmert has pledged business as usual, as public figures urge a time of national unity and an end to political bickering until Israel rides out the crisis.
While respected, Mr Olmert has none of the clout nor the power base that enabled Mr Sharon to bulldoze his way through opposition to last year's pullout from the Gaza Strip, the defining moment of his five-year premiership.
One of his trickiest decisions will be the handling of this month's Palestinian parliamentary elections in which Islamic militant group Hamas is fielding candidates for the first time.
Mr Olmert told US Secretary of State Condoleezza Rice in a telephone call Tuesday that Israel would make a final decision at Sunday's cabinet meeting on whether to allow east Jerusalem residents to vote in the January 25 election.
Palestinian leader Mahmoud Abbas has warned that he is ready to cancel the whole election if that approval is not forthcoming.
A decision on whether Mr Sharon's condition permanently incapacitates him as premier will be made by Israel's attorney general Menachem Mazuz only after doctors have determined the full damage to his brain.