Israel: union leader shocks Peres to win Labor leadership contest

Fiery union leader Amir Peretz won a stunning victory over Shimon Peres in the leadership contest for Israel's Labor Party, officials said Thursday, dealing the party's elder statesman the latest in a long line of defeats and promising to shake up the country's political system.

Peres, the current party leader, had wanted Labor to remain as the junior partner in Prime Minister Ariel Sharon's governing coalition. Peretz has said the party should pull out of the coalition and work for early elections.

The loss cemented Peres' image as a perennial loser. While Peres, a Nobel peace laureate, is widely revered abroad, he has had trouble connecting with Israeli voters and failed in five previous elections for prime minister, reported AP.