Israel's Livni now in battle for premiership

JERUSALEM (AFP) — Fresh from her election as the head of Israel's governing Kadima party, Tzipi Livni on Thursday set out to become the country's second woman prime minister and avert snap elections that could stall Middle East peacemaking.

In her victory speech, the foreign minister said she wanted to form a new government as quickly as possible, a daunting challenge for the new leader of a party dogged by corruption scandals and involved in uneasy alliances.

The 50-year-old Livni narrowly won Wednesday's party leadership vote to replace scandal-plagued Prime Minister Ehud Olmert , who is standing down to battle a number of corruption allegations.

Livni secured 43 percent of the vote and a lead of just one percentage point -- or 431 votes -- over her main rival, Transport Minister and hawkish former army chief Shaul Mofaz, who announced he will now take a break from politics.

Right-wing opposition leader Benjamin Netanyahu swiftly seized on the narrow margin of victory to demand snap parliamentary elections, warning that a new government would have no popular mandate without them.

"The most democratic decision to take would be to call elections," the hawkish former premier told a news conference in Tel Aviv.

"We should allow the millions of Israeli citizens to choose who will lead them and not leave such a vital question in the hands of a few hundred Kadima supporters."

Opinion polls suggest that Netanyahu's Likud is likely to emerge as the largest party if snap polls are held.

New parliamentary elections would not normally be due before late 2010.

Livni's victory could see her follow in the footsteps of Golda Meir who served as the country's first woman prime minister from 1969 to 1974.

But her election looks unlikely to end the political turmoil brought on by the graft accusations against Olmert, as it remains uncertain whether Livni will be able to garner sufficient parliamentary support to form a government.

"She is going to have to engage in exhausting negotiations that will oblige her to be more guileful and manipulative than she has ever had to be before," the mass-circulation Yediot Aharonot daily said in an editorial.

The former Mossad spy, who has been leading the US-backed peace negotiations with the Palestinians, will have 42 days to form a government in order to avert early elections.

"I will do my utmost not to disappoint you. I want to do what's best for the country," she told supporters.

But just how tough a challenge she faces became immediately obvious as the Shas party, which has played the role of kingmaker in the past, laid out its conditions for taking part in a Livni government.

Eli Yishai, who heads the religious party, said this included ruling out any negotiations on the future of Jerusalem.

Israel considers the city its eternal and undivided capital, including east Jerusalem which it annexed after the 1967 war and which the Palestinians demand as the capital of their promised state.

The issue is a key sticking point in negotiations between the two sides that were revived at a US-hosted conference in November but have since made little tangible progress.

The continuing political turbulence further dims chances of reaching a peace deal by the end of the year, a goal Olmert and Palestinian president Mahmud Abbas set at the November conference in Annapolis, Maryland.

Livni spoke by telephone on Thursday with US Secretary of State Condoleezza Rice, army radio said. She also received a message of congratulation from Egyptian President Hosni Mubarak, one of Israel's key Arab partners.

"Livni will continue with the peace process. The peace process is part of Livni's platform and is one of the main reasons she was elected," MP Yitzhak Ben Yisrael told AFP.

Palestinian negotiator Saeb Erakat said the vote was an "internal Israeli affair" but that he hoped it would lead to stability.

"We hope there will be comprehensive and serious negotiations and that the Israeli voter will choose the removal of the settlements and the wall, and strong cooperation with a Palestinian partner," he told AFP.

Olmert, who announced on July 30 that he would step down once Kadima picked a new leader, has faced public uproar over a string of corruption investigations that could lead to criminal charges against him.