Olmert set to step down after September polls

It also raises questions about the political legacies of both President Bush and Olmert, who have hoped to burnish their reputations by achieving breakthroughs in West Asia peace talks before leaving office.

Olmert’s domestic credibility has sunk so low that it is unclear whether he still has the legitimacy or the political traction to make historic concessions to Arab adversaries at all. His political weakness may also undermine his ability to work in partnership with the Americans in pursuit of West Asia peace.

Olmert, speaking live on Wednesday on Israeli television, passionately reiterated his commitment to peace but acknowledged that the corruption allegations made it impossible for him to continue in his office.

“The current slander campaign,” Olmert said, “including by people who truthfully believe in the virtue of the state and its image, raises a question I cannot and will not ignore: What is more important? Is it my own personal justice, or the public good?”

Many commentators described his speech as statesmanlike, allowing him to leave office with a modicum of dignity and the air of a man who — belatedly in the eyes of his many critics— had finally done the right thing.

Previously, Olmert had pledged to resign only if charged. On Wednesday, he vowed that he would continue to fight the legal battle and prove his “innocence and clean hands”.

Olmert is suspected by the authorities of crimes including bribery, fraud and breach of trust, but he has not been charged with anything so far. He admitted to having made “mistakes” before he became Prime Minister in 2006. In one high-profile case, Olmert is suspected of having received tens of thousands of dollars in cash from Morris Talansky, a Long Island fund-raiser and financier, over a period of 13 years.

In the latest case, known here as “Olmert Tours”, the Prime Minister is suspected of having billed multiple state and charitable agencies for the same flights when he was mayor of Jerusalem and a Government minister, using the extra money for private family trips. The police and the Justice Ministry publicised details of that investigation on July 11.

At once composed and defiant, Olmert devoted the first part of his almost 10-minute speech to extolling his Government’s achievements on issues like security and poverty. But some of his most emotional statements were about his commitment to peace.

“I continue to believe wholeheartedly that reaching peace, ending terrorism, strengthening security and establishing a different relationship with our neighbors are the most vital goals for the future of the state of Israel,” he said.

A White House spokesman, Gordon D Johndroe, said that Olmert and Bush spoke just before the announcement. Bush “wishes him well and will continue to work closely with him while he remains Prime Minister”.

A spokesman for the Palestinian president, Mahmoud Abbas, who has staked his own reputation on the peace effort, described Olmert’s resignation plans on Wednesday as an “internal affair”.

Olmert said that Israel was “closer than ever” to reaching understandings that might serve as a basis for agreements with the Syrians and the Palestinians, adding that he would work until his last day in office to bring the negotiations to a successful conclusion “that bears hope”.

The leadership race in the governing Kadima Party has been set for September 17, with a runoff, if necessary, on September 24. The main contenders are Foreign Minister Tzipi Livni, who leads the Israeli team in talks with the Palestinians, and Shaul Mofaz, the more hawkish transportation minister who is a former defense minister and a former army chief of staff.

If the new Kadima leader fails to form a Government, Israel will hold an early election, probably in early 2009, giving Olmert a few extra months in office.