Olmert vow to quit rattles Mideast peace hopes

Criticism of investigations
Olmert's brief address from his official Jerusalem residence included harsh criticism of the police investigations. He said he was choosing the public good over personal justice.

Although he has consistently denied wrongdoing, he had pledged to resign if indicted.

"I was forced to defend myself against relentless attacks from self-appointed 'fighters for justice' who sought to depose me from my position, when the ends sanctified all the means," he said, appearing angry.

Olmert did not answer questions from reporters gathered in his courtyard.

His decision not to run in the Kadima primary set in motion a process to choose a new prime minister. Main candidates in his party are Foreign Minister Tzipi Livni and Transport Minister Shaul Mofaz, a former defense minister and military chief of staff.

Polls show Livni with an advantage in the primary. If she were to replace Olmert, she would become the second female prime minister in Israeli history, after Golda Meir.

If Olmert's successor as party leader can form a coalition, Israel could have a new government in October. If not, an election campaign could extend into 2009. Olmert would remain in office until a new premier is chosen, heading a caretaker government after he submits his resignation to President Shimon Peres.

Olmert's Kadima Party has 29 seats in the 120-member parliament, and his successor must patch together a majority coalition. Olmert's main partner, Labor, is headed by another ex-premier, Ehud Barak, who would like his old job back and may be more comfortable forcing an election than playing second fiddle to Livni.

Hard-line Netanyahu up next?
Israel's labyrinthine political system is weighted against a quick internal Kadima resolution to the crisis — with hard-line ex-premier Benjamin Netanyahu of Likud waiting to take advantage. Netanyahu opposes most concessions to the Palestinians and Syrians suggested by Olmert.

While neither the Palestinians nor Syria would be eager to close a deal with a lame-duck leader, the prospect of Netanyahu lurking in the wings could propel them forward.

On Thursday, Netanyahu called for a new parliamentary election.

Recent opinion polls suggest Netanyahu's Likud party would win a snap election.

"This government has reached an end and it doesn't matter who heads Kadima. They are all partners in this government's total failure," Netanyahu told Israeli Radio.

"National responsibility requires a return to the people and new elections," he said.

Olmert, 62, gained governing experience in a decade as mayor of Jerusalem. He was named vice premier as a move of political expediency when it appeared that Ariel Sharon would serve indefinitely. Olmert took over as premier after Sharon suffered a massive stroke in January 2006.

During his address Wednesday, he said, "Did I make mistakes over my political career? Without a doubt, yes, and I regret them and I am sorry. But is the real picture that which is presented to the public? Absolutely not."

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