Final answer:
The statement is false; Sunnis do not believe that leadership should be held only by a blood relative of Muhammad, while Shias do believe that leadership should reside within Muhammad's family, through Ali.
Step-by-step explanation:
The statement is False. The major difference between Sunni and Shia Muslims lies in their beliefs regarding leadership after the Prophet Muhammad. While Shia Muslims believe leadership should stay within the Prophet's family, specifically through his cousin and son-in-law Ali, Sunnis do not consider such a blood relationship to be a necessary condition for leadership of the Muslim community. They contend that any sufficiently righteous and competent Muslim could become a leader, and historically, leadership was elected by the community.
Sunni Muslims respect Ali and other leaders from the Prophet's family, but they do not agree that leadership of the Muslim community is a right that belongs exclusively to Muhammad's descendants. Instead, they consider a variety of factors, including piety and adherence to the traditions of the Prophet (the sunna), in choosing their leaders.
On the other hand, the Shia place emphasis on the bloodline of the Prophet Muhammad through Ali and believe that the Imam, a term they use for their spiritual leader, must be a direct biological and spiritual descendant of Muhammad's family. This belief is central to Shia Islam.