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Ehud Olmert averted a crisis in Israel’s coalition government over a motion to dissolve the Knesset.

Defense Minister Ehud Barak’s Labor Party, the Israeli premier’s junior coalition partner, was to have voted Wednesday in favor of an opposition bill to dissolve the parliament and bring on early elections.

But Labor backed off at the last minute when Olmert’s envoys said the ruling Kadima Party will hold an internal election by Sept. 25, allowing his rivals to challenge him for the chair.

Barak came out against Olmert after Israeli police announced an investigation into the prime minister’s finances last month. But neither leader is seen as interested in triggering an early election given the likelihood they would be beaten by popular opposition leader Benjamin Netanyahu.

Without Labor’s support, the legislation tabled by Netanyahu’s right-wing Likud Party was unlikely to pass first reading in the Knesset.

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