"HOT SPRINGS, Va. -- Virginia Sen. George Allen received a standing ovation Saturday from hundreds of Republican activists who are reeling from his loss and eager to find a new formula for success after a half-decade of internal party division.

Allen gave no clues to his future in his first public comments since conceding the Senate seat to Democrat James H. Webb two days after the election. But he hinted that he is not finished with public office, promising to stand "shoulder to shoulder" with the state's Republican leaders.

"Next month, I will no longer have the responsibility and privilege of serving as your United States senator," he told a ballroom packed with 600 subdued GOP activists gathered for the annual winter meeting and party fundraiser. "But I pledge to keep working with all of you . . . to advance our shared principles, our missions that are so important to the future of Virginia."

As its first official act after Allen's loss, the GOP's state central committee chose former Republican National Committee chairman Ed Gillespie to lead the party. A national figure with proven fundraising and organizing skills, Gillespie vowed to return the party to the winning column in state and federal elections during the next three years.

But he also offered a practical warning for a state party that is at war with itself over the issues of taxes and transportation: Virginia Republicans must find a way to stop bickering with each other.

"Somebody who agrees with me 80 percent of the time is my friend, not my enemy," Gillespie said. "We are all one party. We can live with differences. But we can't live with divisions."

Although most of the people who attended the Advance, as the annual meeting is called, are die-hard conservatives who oppose raising taxes and hold traditional Republican views on social issues, the divisions were still evident. Many of the party's leading moderates did not show up.

The gathering still was dominated by hand-wringing about how to bring the party together without compromising its principles.

"This is a challenge to our leaders in our legislature to find some common ground," said Rep. Thomas M. Davis III (R). "The voters look at our legislature today and see the fighting between the different factions and say: 'Are we capable of governing?' That's going to be our challenge in 2007."

Since Allen's loss, Davis has been in discussions with House Speaker William J. Howell (R-Stafford) and others in the legislature about how the anti-tax House Republicans can reach a compromise with the state Senate's more moderate GOP leaders on the issue of transportation.

If something doesn't happen, he told activists, the Democrats will win more seats, especially in more moderate Northern Virginia.

"I've never seen them so emboldened," he said of Democrats. "They are out-recruiting us and out-raising us. That's got to stop."

But the GOP's conservative members, such as State Sen. Ken Cuccinelli II (R-Fairfax), reject the need for compromise. They say the party has to stand firm against higher taxes or risk losing the votes of its most ardent supporters.

"If we don't stand for something, then it's just a nice-guy contest," Cuccinelli said. "That's not a consistent path either to governance or to victory."

The debate, conducted in public speeches but also in hushed hallway conversations, is at times disjointed.

Lt. Gov. Bill Bolling declared during a breakfast speech that "we have got to get along together again," a clear reference to resolving the split between House and Senate Republicans on taxes. But a few minutes earlier, Bolling had urged the assembled partisans not to compromise.

"We cannot be the majority party in Virginia by being the party of higher taxes," he roared. "We have to be the party of lower taxes."

Former Attorney General Jerry W. Kilgore (R), who lost to Gov. Timothy M. Kaine (D) last year, said in an interview, "We've got to unify as a party and move forward with an agenda." But he quickly added that "We cannot give up on [taxes]. We can't say it's okay to be like Democrats and raise taxes."

There was also a bit of division at the Advance over the choice of Gillespie to lead the party. A small group of conservative activists passed out bumper stickers that read "Say No to Mr. Ed" and had a picture of a horse's head inside a red circle with a slash through it.

When it came to the vote, however, the central committee chose Gillespie by acclamation.

Gillespie will now have to contend with Allen's loss to Webb last month, the second stunning defeat for Virginia Republicans, after Kilgore's failure last year. For the second time in a row, the Advance has become a haven of grousing and finger-pointing about how Republicans lost the big one.

Many activists and elected leaders privately blame Allen and his campaign for making serious gaffes and for failing to rectify those mistakes in time. But none were willing to say that publicly, in part because most predict that the senator will make a comeback, perhaps by running for governor in 2009.

Anna Lee, a Fairfax activist, dug out her old "Allen for Governor" buttons from the 1993 campaign and wore them at the Advance. One of the buttons said: "Susan Allen's Husband for Governor."

"He was one of the best governors we ever had," Lee said. "Webb didn't win. We lost."

But there was also a sense of resolve here to be aggressive in criticizing Democrats. Kevin Gentry, the master of ceremonies for Saturday's lunch, read an angry letter from a friend about Webb's conversation with President Bush last month.

"Now, they're waking up to the reality that they've replaced a Virginia gentleman who accomplished a great deal with someone who has been very ungentlemanly and who has not accomplished very much," Gentry said. "Virginians are already realizing what a whopper of a mistake they made this election."

And even as they try to figure out what went wrong and how to fix it, party leaders, local activists and elected officials say they are not willing to give up.

"We do not rest on our laurels and we most certainly do not wallow in our sorrows," said Republican Party Executive Director Shawn Smith.

Said activist Jim Wilson: "We're not picking over the bones, we're planning the attack."" (Michael D. Shear, The Washington Post, December 3, 2006)

Editor's Note: An index to coverage of George Allen on the Loper website may be found at http://loper.org/~george/archives/2006/Aug/925.html