- The Washington Times - Thursday, July 31, 2008

TEL AVIV | Israeli Prime Minister Ehud Olmert said he would resign from office after his Kadima party chooses a successor in a vote set for September, conceding that corruption investigations have eroded his mandate to govern.

The unexpected address to the nation, delivered from his residence in Jerusalem, spurred calls from opposition lawmakers for new parliamentary elections. It also exposed the current talks with the Palestinians and Syria to criticism that Mr. Olmert has no mandate to negotiate peace agreements.

“I’ve decided not to compete in the Kadima primary,” he said. “When there is a new chairman of Kadima, I will step down.”

Despite the announcement, Mr. Olmert said he would continue to pursue peace talks until his last days in office.

In Washington, Secretary of State Condoleezza Rice met with the chief Israeli and Palestinian negotiators, who said they would work as hard as it takes to reach an agreement for establishing a Palestinian state by year’s end.

“The issues are difficult, and they have always been difficult. There is nothing surprising in that, but … the goal remains the same,” Miss Rice told reporters after the meeting, which she called “very fruitful.”

Saeb Erekat, an aide to Palestinian negotiator Ahmed Qureia, said, “as Palestinians, we want to make peace with all Israelis, not with this party or that person.”

Ori Nir, spokesman for Americans for Peace Now, a pro-Israel organization that promotes Arab-Israeli negotiations, called for “responsibility and moderation” in Israel’s dealings with its neighbors during this time of political uncertainty.

“This period calls for responsibility and moderation. It calls for Israel’s leaders to refrain from provocative moves in the West Bank, such as settlement expansion, and to refrain from adventurous, belligerent actions on Israel’s other fronts - Iran, Lebanon and Syria,” he said.

Mr. Olmert’s decision shifts attention to Foreign Minister Tzipi Livni and Transportation Minister Shaul Mofaz, the two leading candidates in the Kadima party leadership battle, and whether they’ll be able hold together the coalition in a vote of confidence.

The decision is in the hands of about 70,000 registered members of the centrist party, set up in 2005 by former Prime Minister Ariel Sharon. Polls, which once favored Mrs. Livni, seem to be shifting toward Mr. Mofaz - a former army chief of staff who is thought to be backed by Mr. Olmert.

“It’s very difficult to say. It’s not clear what’s going on in Kadima,” said Hebrew University political science professor Gabriel Sheffer. “Some people say Mofaz has the advantage, and some people say it’s Livni.”

While Mrs. Livni is considered more dovish, Mr. Mofaz is known as a security hawk.

Whoever wins will have a grace period of about a month to shore up commitments from new coalition partners and form a government. If they fail, Israeli law requires elections within 90 days.

Such a scenario would favor center-right Likud party leader Benjamin Netanyahu, who, according to a public opinion poll conducted by Israel’s Channel 10 News, enjoys a wide advantage over Mrs. Livni or Mr. Mofaz, and over Defense Minister Ehud Barak, the leader of the center-left Labor Party.

That would also leave Mr. Olmert in office - albeit, as a lame duck - through the fall.

Many analysts cautioned that Israeli political parties, with the exception of the opposition Likud party, are opposed to elections in 2009.

In office since January 2006, Mr. Olmert in recent months became the focus of a corruption investigation that prompted a growing number of political allies to call for his resignation. Mr. Olmert conceded to the September primary election as a concession to his critics, and until Wednesday it was unclear whether Mr. Olmert would be a candidate.

The corruption inquiries, which centered on $150,000 he accepted from a U.S. businessman, exposed the Israeli prime minister to accusations that his positions in negotiations were calculated to deflect criticism from the accusations.

Even Arab negotiators in Syria and the Palestinian Authority had remarked that Mr. Olmert’s political capital had sunk so low that he was no longer a suitable partner for negotiations.

“Every day, the burden of finishing work is enormous,” said Tel Aviv University political science professor Gideon Doron. “It doesn’t matter if the accusations are unfounded; he has had to fight more and more and more. It was like a tsunami. He lost his base of legitimacy.”

cNicholas Kralev contributed to this report from Washington.

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