Olmert to step down immediately after successor is chosen

Occupied Jerusalem: Prime Minister Ehud Olmert will step down immediately after his party chooses a successor this month, a confidant said on Thursday, shooting down speculation that the Israeli leader would try to linger in office for months.

The announcement means that Israel could find itself racing to form a new government in as little as a week. And it raised new questions about Washington's stated goal of brokering an Israeli-Palestinian peace agreement by the year-end.

Olmert, who is battling a corruption investigation, announced in July that he would resign some time after his Kadima Party chooses a new leader in a September 17 primary. But he was vague about the timing of his exit. Under Israel's complicated political system, Olmert could theoretically stretch out the transition process for months.

The Olmert confidant said the prime minister will announce his formal resignation "immediately following the primary." The confidant, who spoke on condition of anonymity because Olmert has not publicly revealed his plans, is in close daily contact with Olmert.

Caretaker

Olmert would stay on as a caretaker while his successor cobbles together a new coalition. However, Olmert's decision to formally resign will hasten the formation of a new government or alternatively force the country to hold a general election a year and a half ahead of schedule.

Foreign Minister Tzipi Livni, Israel's lead negotiator in peace talks, and Cabinet minister Shaul Mofaz, a former defence minister and military chief, are the front-runners.

Once Olmert resigns, Israel will head into weeks, perhaps months, of political uncertainty. As leader of the largest party in parliament, his successor will have up to 42 days to form a new coalition government. If they don't succeed, the country would be forced to hold a new election early next year.

Opinion polls show a tight race in general balloting between Livni and hardline former Prime Minister Benjamin Netanyahu, whose election would almost surely set back the US-sponsored Mideast peace drive.

With that in mind, both Kadima frontrunners are expected to try to keep the current coalition intact. They might not succeed, however, because coalition partners are likely to push new demands.

During this period, Olmert would remain in office as caretaker. But it would be difficult for him to push forward with his major diplomatic initiatives - peace talks with the Palestinians and separate, Turkish-mediated negotiations with Syria.

Opponents have already complained that the lame-duck Olmert has no authority to be negotiating such sensitive issues as he prepares to leave office.

"There are no restrictions legally, but political and public pressure can prevent the government from functioning practically. Olmert knows this very well," said Avraham Diskin, a political scientist at the Hebrew University in occupied Jerusalem.

Last November, Olmert and Palestinian President Mahmoud Abbas agreed to try to reach a final peace deal before President Bush leaves office.

There are no restrictions legally, but political and public pressure can prevent the government from functioning practically. Olmert knows thisvery well."