Israel's Ruling Party Elects New Leader

At lunchtime Wednesday Israeli Prime Minister Ehud Olmert helped vote himself out of a job, and by Thursday morning the country's foreign minister declared victory in a tight race to replace him as the head of the country's governing party

Olmert and 70,000 registered members of the Kadima political party cast votes for a new leader, and and the winner of that election is Foreign Minister Tzipi Livni.

For an outright victory, Livni needed 40 percent of the vote. Official results showed Livni winning over her nearest rival, former defense minister and military chief Shaul Mofaz, by a 1.1 percentage point margin in the Kadima Party primary elections — a far narrower victory than the double-digit romp polls had predicted.

Livni, a political moderate, barely edged out hawkish rival Mofaz, a former defense minister, in a contest that could have far-reaching implications for peacemaking with the Palestinians and Syria.

Livni said she would launch coalition talks on Friday, even though President Shimon Peres cannot officially ask her to try to put together a government until Olmert resigns the premiership.

Olmert was forced into this act of political suicide by the weight of the corruption allegations against him. Israeli police recently submitted a file of evidence to the country's attorney general recommending charges against Olmert in at least two cases.

Not Much Enthusiasm

Livni will take over the Kadima Party and then try to form a coalition government from the complex patchwork of parties and factions that make up the Israeli parliament, or Knesset. Only then will she be confirmed as the next prime minister.

There was no great enthusiasm in the country for either candidate, it seemed.

One of Israel's leading political columnists commented Wednesday, "It is not an easy choice. Choosing between Tzipi Livni and Shaul Mofaz is like choosing between two shades of gray. These candidates do not have charisma, vision or leadership ability."

In an interview with ABC News, Gideon Doron, a professor at Tel Aviv University, was equally pessimistic about the two leading candidates: "They don't have the experience and I don't know if they know how to compromise."

Livni ran on a ticket of clean government -- an attempt to tap into the growing public disgust with corruption in Israeli politics.

Mofaz is a former soldier and was defense minister under Ariel Sharon. He played the well-worn security card.

Cohesive Government the Goal

The formation of a working coalition government will be a tough task. The current coalition is unstable, and many here predict early general elections. The ultra orthodox religious party Shas, already in government, may hold the key to the future.

The extent to which Livni will be willing to compromise with Shas' demands for more public funding of religious communities will largely determine whether she can form a government.

The stakes are high, as Israel and its U.S. allies face a series of important challenges.

First, there is the U.S.-backed peace process with the Palestinians. Livni is already the leading Israeli negotiator in the talks. She is committed to continuing the process but is viewed as more cautious than Olmert.

On the recently opened dialogue with Syria, Livni is less enthusiastic and has said she would stop the process in its tracks unless Syrian President Bashar Assad delivers a firm commitment to cut ties with extremists.

The key foreign policy challenge, however, will be Iran and its pursuit of nuclear power. There has been much speculation about Israel's plan to attack Iran's facilities unless the Islamic Republic stops its uranium refinement activities.

The fateful decision to launch such an attack will probably fall during the next year and on the next prime minister's watch.

And What of Ehud Olmert?

There is much speculation about what he will do once his party has voted him out of its leadership. According to the constitution, he can remain in the prime minister's office until the Knesset swears in the next prime minister.

Mark Regev, his senior press spokesman, told ABC News, "Once a new Kadima leader has been selected he will go to the president and resign and become the interim prime minister of an interim government. He will not shirk those responsibilities."

The implication is that Olmert will not quit the top job until his replacement forms a new government, and that can take weeks. And if the elected successor fails, Olmert may well stay in the prime minister's office until new elections are held, probably in March 2009.

So although he votes himself out of one top political job today, Olmert may yet be some months away from taking his final bow on Israel's political stage.

The Associated Press contributed to this report.