Olmert's vow to quit shakes peace talks
JERUSALEM (Reuters) - Middle East peacemaking was in turmoil on Thursday after Ehud Olmert, dogged by corruption probes, said he would resign as prime minister after his party picks a new leader in September.
Israeli politicians and analysts said Olmert's surprise announcement could force an early national election which opinion polls show could be won by rightist leader, Benjamin Netanyahu.
"I have decided I won't run in the Kadima movement primaries, nor do I intend to intervene in the elections," Olmert said, referring to his ruling centrist party, from his official residence in Jerusalem.
"When a new (Kadima party) chairman is chosen, I will resign as prime minister to permit them to put together a new government swiftly and effectively," Olmert said.
Olmert, who could stay on as a caretaker prime minister for months while a successor struggles to cobble together a new coalition, vowed not to "ease up" on peacemaking "for as long as I remain in office."
The White House said its goal of getting Olmert and Palestinian President Mahmoud Abbas to reach a peace deal this year was unchanged. Palestinian negotiator Saeb Erekat said the negotiations would continue despite Olmert's announcement.
But as an outgoing leader Olmert would lack the political strength to make critical decisions in U.S.-backed peace talks with the Palestinians or in indirect negotiations with Syria, which already show no signs of being close to any breakthrough.
Yasser Abed Rabbo, an aide to Abbas said: "We are sorry for the decision but this is the Israeli system."
Israeli media said Olmert informed U.S. President George Bush of his decision beforehand, considering the repercussions it could have on peace talks.
Olmert's decision also plunged Israel's fractious political system into uncertainty, even as he faced weeks of public pressure to resign over probes of suspicions he took bribes from an American businessman, and double-claimed for travel expenses.
Olmert has denied any wrongdoing, and vowed in his statements on Wednesday to fight for his innocence.
Some Israeli politicians called for parliament to move up a national election currently scheduled for 2010, or speculated that an early poll was likely.
"Parliament should disperse and we should hold a new election," Limor Livnat, a lawmaker for the right-wing Likud party, said.
Defence Minister Ehud Barak, head of the left-of-centre Labor party and Olmert's largest coalition partner, told CNN that it was "not yet clear whether there will be election in three or four months from now," if Olmert steps down.
Israeli opinion polls favor Foreign Minister Tzipi Livni, Israel's top negotiator with the Palestinians, to win the Kadima leadership contest, scheduled for September 17. Transport Minister Shaul Mofaz, a former defence chief, is close behind.
Livni, in Washington for trilateral talks with U.S. and Palestinian negotiators, welcomed Olmert's remarks, saying "it was the right decision, though it wasn't easy."
A former Mossad operative, Livni, 50, launched her campaign to unseat Olmert in earnest earlier this week when she told a rally that Kadima, the party they had launched in 2005 alongside former prime minister Ariel Sharon, had lost its way.
It could take whoever wins the Kadima poll weeks or months to build a new coalition government with Israel's bickering political factions, once Olmert steps down.
Netanyahu, a former prime minister and leading critic of Olmert's peacemaking policies, could try to build his own coalition to stymie Kadima and possibly force a new election.
Some analysts saw Olmert's plan as a ploy to remain in power despite controversy over the police probes of him.
"Looking at Olmert's history, this is a strategic move," said Professor Gerald Steinberg of Israel's Bar Ilan University.
If the new head of Kadima fails to set up a coalition, "then he will be called back or he will become ... the acting prime minister until there are elections", Steinberg said.
(Additional reporting by Alistair Lyon in Jerusalem, Mohammed Assadi in Ramalllah, Dan Williams in Washington and Wafa Amr in Amman)
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