Ehud Olmert declares victory, but faces tough task in forming government

After declaring victory in Israeli elections, acting Prime Minister Ehud Olmert's Kadima Party said Wednesday it would quickly form a broad ruling coalition that will pull out of much of the West Bank and draw Israel's borders by 2010.

Party officials said that despite a weaker-than-expected performance in Tuesday's election, Kadima has widespread support in parliament and would seek to finalize its withdrawal plans within a year.

U.S. President George W. Bush congratulated Olmert in phone call on Wednesday and invited him to visit Washington after he forms his government, White House press secretary Scott McClellan said.

Kadima won only 28 seats in Tuesday's election, less than the 35 it had hoped for, but still making it the largest party in the 120-member parliament. Like every other ruling party in Israeli history, it will have to form a coalition government with other parties.

Haim Ramon, a senior Kadima lawmaker, said the party is confident it will get broad backing and have a government in place after the Jewish holiday of Passover, which begins in mid-April. "I believe we will have more than 70 legislators who will support the disengagement plan," Ramon told Israel Radio, referring to the expected West Bank pullout.

Kadima officials said informal coalition talks have already begun.

Israel 's ceremonial president, Moshe Katsav, said he will start talking to party leaders next week about forming a coalition. Traditionally, the Israeli president gives the nod to the leader of the largest party to try to form a government. "I assume there will be a stable government," Katsav told Israel Army Radio.

Declaring victory early Wednesday, Olmert renewed his call for peace talks with the Palestinians and said he is prepared to make painful compromises, such as uprooting some Jewish settlements in the West Bank .

"In the coming period, we will move to set the final borders of the state of Israel , a Jewish state with a Jewish majority," Olmert said.

He said Israel would seek an agreement with the Palestinians, but act on its own if it can't reach peace.

This scenario appears increasingly likely following the victory by Hamas' victory in Palestinian legislative elections. The militant group's new government, which rejects peace talks, was set to be sworn into office late Wednesday.

Hamas rejected the unilateral approach. "Olmert's statement is a clear threat," said Nasser Ashar, Hamas' deputy prime minister. "He has his own plan, and he wants to implement it, whether we accept it or not."

Kadima lawmaker Otniel Schneller said that during its first year in power, the government will try to finalize its withdrawal plan while waiting to see whether Hamas moderates its views.

Schneller, an architect of the plan, told The Associated Press that Kadima will coordinate preparations with settler leaders, while also aiming to guarantee the Palestinians a viable independent state on a continuous stretch of territory. "There is no precise timetable," he said.

The moderate Palestinian president, Mahmoud Abbas, urged Olmert to return to the negotiating table. "We want negotiations and not to dictate unilateral solutions," he said in Khartoum , Sudan , where he was attending an Arab Summit.

Other summit participants voiced similar calls. "It is absolutely out of the question to accept ... unilateral withdrawals according to Israeli whims," said Amr Moussa, secretary-general of the Arab League.

With 99.7 percent of the votes counted Wednesday, the center-left Labor captured 20 seats and the hawkish Likud, which had dominated Israeli politics for decades, plummeted to 11 seats, making it only the fifth-largest party in the new parliament.

Final results are expected Friday, officials said. But for the first time, Israel will not be led by Labor or Likud. The results showed voters turning away from conventional parties to an assortment of third parties.

Among them were Shas, a party catering to Orthodox Jews of Middle Eastern origin that won 13 seats; Yisrael Beitenu, a Russian immigrants' party that wants to redraw Israel 's map by transferring Arab towns to Palestinian control, with 12 seats; and the new Pensioners' Party, which won seven seats.

"The Big Bang," said the headline in Israel 's two largest dailies, referring to the new political shake-up. The aftermath will likely be a period of difficult negotiations and potential coalition partners.

Olmert has said he would govern only with parties that accept his program.

Kadima officials said likely partners include Labor, which ran on a social platform advocating a higher minimum wage and guaranteed pensions for the elderly; the Pensioners' Party, which also wants more benefits for retirees, Shas and a second Orthodox party.

The dovish Meretz party could also join the coalition, and Olmert could also receive tacit support from Arab parties that won 10 seats.

Tuesday's vote was billed as a referendum on Olmert's withdrawal plan, and analysts said Kadima's lackluster performance could hinder but not prevent his ability to push forward.

"It will take a while to massage the partners into willingness to hear about very costly and independent, unilateral moves," said Asher Arian, a senior fellow at the Israel Democracy Institute, a Jerusalem think tank.

In an indication of the challenges ahead, Labor lawmaker Eitan Cabel said the party would seek the coveted Finance Ministry in the next government.

Kadima officials said Olmert, a staunch capitalist, opposes the demand. The officials, speaking on condition of anonymity because they weren't authorized to speak to the media, said Olmert and Labor leader Amir Peretz plan to meet in the coming days.

Olmert inherited Kadima leadership after Sharon, the country's most popular politician, suffered a stroke in January and lapsed into a coma. Much of Kadima's campaign was built around Sharon, who devised the unilateral approach by leading Israel's withdrawal from the Gaza Strip last year.

Under Olmert's plan, Israel would carry out a similar unilateral pullback from the West Bank, dismantling dozens of settlements deep in the territory, while beefing up major settlement blocs and incorporating them inside Israel's borders.

While handing over large chunks of the West Bank to the Palestinians, the plan falls short of Palestinian claims to all of the territory. Israel captured the West Bank in the 1967 Mideast war.

The Kadima victory dealt a tough blow to hawkish parties that oppose further withdrawals. Likud leader Benjamin Netanyahu, a former prime minister, was among the biggest losers. The party's drop, from 38 seats to 11, was summed up by a headline in Yediot: "The crash."

Jewish settler leaders, who oppose any West Bank withdrawal, also scrambled to contain the damage. "We don't think that Olmert got a mandate to go ahead with his destructive plans," settler leader Shaul Goldstein said. "We will find a way to protest and battle, but we won't be dragged to violence."

Meanwhile, European leaders gave a cautious welcome to Kadima's victory. British Prime Minister Tony Blair called Olmert to offer congratulations, while the French foreign minister, Philippe Douste-Blazy, said the election result was "good news for peace", reports the AP.


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