FACTBOX: Israeli leader sets stage for political change

(Reuters) - Opinion polls on Friday showed rightist Likud leader Benjamin Netanyahu and the ruling centrist Kadima party's Tzipi Livni running almost neck-and-neck if an election is held to replace Prime Minister Ehud Olmert.

Olmert announced this week he will resign as prime minister after his party chooses a new leader in September. His announcement has set the stage for three scenarios:

* Opinion polls show Foreign Minister Tzipi Livni and Transport Minister Shaul Mofaz, a former defense chief, are favorites to win Kadima's leadership contest. The winner would try to forge a coalition. It would take office once sworn in by the Knesset, Israel's 120-member parliament, when it returns from recess in late October. Olmert would remain caretaker prime minister until then.

* Some of Olmert's bickering coalition partners may balk at joining a coalition with the more politically moderate Livni if she became Kadima leader.

These parties could swing behind rightist parliamentary opposition leader Benjamin Netanyahu and force President Shimon Peres to ask Netanyahu to try to form a coalition. Such a government might be reluctant to pursue U.S.-backed peace talks with the Palestinians or indirect negotiations with Syria.

* Olmert's resignation could prompt a majority in parliament to opt for an early election. Parliament could dissolve itself and set an election date before the scheduled date in 2010.

An election must be held within five months of the Knesset voting to dissolve itself, but the gap is usually shorter. That means that Olmert could remain caretaker prime minister until February or March.

Netanyahu's Likud party has long been seen as favorite to win a future election but two newspaper polls published on Friday showed Likud and Kadima headed by Livni as running neck-and-neck.