Ehud Olmert's Kadima party set for win

Jerusalem: Israeli interim Prime Minister Ehud Olmert's Kadima party was set to win an election on Tuesday seen as a referendum on the future of the occupied West Bank, exit polls showed.

Exit polls broadcast by Israeli media after voting ended gave Kadima 29-32 seats in the 120-member parliament, slightly below predictions in pre-election surveys but still putting it in a good position to form a governing coalition.

The new polls forecast centre-left Labour would receive 20-22 seats and the far-right Yisrael Beitenu party 13-14. In a sharp setback for former Prime Minister Benjamin Netanyahu, his right-wing Likud was projected to get only about 12 seats.

"In any final outcome, this is a victory for Kadima. Kadima will form the government," Defence Minister Shaul Mofaz, one of the party's leaders, told Channel Two television.

Acting Prime Minister Ehud Olmert had sought to turn the vote into a referendum for his ambitious pledge to fix Israel's final borders in the lifetime of the next government, but exit polls suggested his party was set to win no more than 29 to 32 of the 120 seats in parliament.

"We are, despite everything, Israel's largest party," Foreign Minister Tzipi Livni told reporters. "Our ambition is to form a stable coalition for the full four years so we can carry out our policies."

Senior party strategist Lior Horev said it was a remarkable achievement for a party which was only formed in November by Prime Minister Ariel Sharon who now lies in a coma in a Jerusalem hospital.

"All in all we are very happy with the results," said Horev.

"It was unimaginable three months ago," he added, noting that the right-wing Likud which Olmert and Sharon had left to found their new party was facing a humiliating rout under its new leader, former premier Benjamin Netanyahu.

"The Likud were defeated because of Netanyahu's aggressiveness," he charged.

Exit polls gave the once mighty faction just 11 or 12 seats, a haul that is likely to leave it in fourth or even fifth place.

Olmert aims in the absence of progress towards peace to impose a border on the Palestinians by dismantling isolated Jewish settlements in the West Bank by 2010 and expanding bigger blocs in the territory.

Palestinians say such go-it-alone moves, sweeping measures that would uproot tens of thousands of settlers while tracing a frontier along a fortified barrier Israel is building inside the West Bank, would deny them a viable state.