Olmert’s Resignation Plunges Israel into Era of Uncertainty

Ehud Olmert’s announcement that he will not seek re-election plunged Israel into deep political uncertainty at a time when the country faces several crucial diplomatic tests.

Confronted with police investigations into possible illegal fund-raising activities and a climate of intense political hostility — including from leading members of his own Kadima Party — the Israeli prime minister held a hastily assembled news conference Wednesday evening to announce he will resign.

The change will become effective once Kadima chooses a new leader in primary elections scheduled for mid-September. Foreign Minister Tzipi Livni and Transportation Minister Shaul Mofaz are the leading contenders.

“Things got out of all reasonable proportion,” Olmert said in his speech, referring to what he called “ceaseless attacks” against him. “The prime minister is not above the law, but he is not by any means under it.”

Maintaining his innocence, Olmert said he would step aside for the public good.

“The time has come for me to take a decision,” Olmert said. “What’s more important than what — my own personal justice or the public good?”

In the short term, Olmert’s announcement means he will stay in office as a lame duck until Kadima elects a new leader – either Sept. 17, when the primary is held, or Sept. 24, when a runoff, if necessary, takes place.

Kadima’s new leader will become the acting prime minister and be charged with assembling a coalition government. The failure to muster a majority of at least 61 Knesset members in the coalition would trigger new general elections.

Aside from casting a cloud of uncertainty over political succession, the development raised questions about how Israel’s major diplomatic initiatives will fare during this period of political transition – including peace tracks with the Palestinians and Syria, and the effort to halt Iran’s suspected nuclear weapons program.

At the time of the announcement, Livni was meeting in Washington with U.S. Secretary of State Condoleezza Rice to discuss those issues. Defense Minister Ehud Barak, who leads the Labor Party, was on a plane heading home from meetings in Washington.

Israeli pundits speculated that the absence of Livni and Barak, two of Olmert’s main political adversaries, from the country was a factor in the timing of the prime minister’s announcement.

Barak could trigger new general elections by pulling Labor out of the governing coalition, but he trails Likud leader Benjamin Netanyahu in polls showing that Netanyahu would win handily if a general election were held today.

By leaving the political stage this way, Olmert ensures that his Kadima successor can run for the next general election in 2010 as the incumbent prime minister, possibly providing a boost to that candidate.

Olmert said Wednesday that he would not mettle in the Kadima primary and that he wanted to engender a respectful and fair political transition.

The prime minister has been under a cloud of investigations almost since his first day in office. Olmert assumed the post in January 2006 when a coma disabled Ariel Sharon, and won an election two months later to retain the premiership.

But the latest scandal, in which American Jewish businessman Morris Talansky testified that he gave Olmert $150,000 in cash over the course of the decade-and-a-half before Olmert became prime minister, crippled Olmert’s ability to govern.

Even Olmert’s decision to re-launch Turkish-mediated peace talks with Syria and sign a cease-fire deal with Hamas in Gaza were viewed with suspicion by some who derided the moves as ploys to ensure his political survival.

Since the Talansky scandal broke, a growing chorus of Israeli pundits, Knesset members and intellectuals had called on Olmert to step aside, if only to allow the government to focus on the urgent threat of a nuclear Iran.

It is not immediately clear how Olmert’s resignation will affect Israel’s campaign to stop Iran from acquiring nuclear weapons.