OLMERT RESIGNS: Israeli Prime Minister Ehud Olmert (right) hands in his resignation to President Shimon Peres on September 21 in Jerusalem

On September 17, Israeli Foreign Minister Tzipi Livni narrowly won a leadership contest in the ruling Kadima Party, setting her up to become prime minister of the nation.

Livni was authorized to organize a new cabinet within six weeks. If she succeeds, she will become the second female prime minister in Israeli history after Golda Meir, who served from 1969 to 1974. The power of Israel and the prospects for peace in the Middle East will be in her hands.

Opportunities and challenges

In late July, Prime Minister Ehud Olmert, mired in corruption allegations, announced he would not seek re-election as party leader and would resign as prime minister after the election. As Deputy Prime Minister, Livni was in a prime position to take his place.

Olmert, who took over in January 2006 after then Prime Minister Ariel Sharon suffered a stroke, struggled during his time in office, said Wang Jinglie, Director of the Division of Middle East Studies at the Chinese Academy of Social Sciences. He lost support during the 2006 war with Lebanon, which drew criticism from both the Israeli people and the international community. "The Lebanon war cost Israel at least 10 times more than it did Lebanon," Wang told Beijing Review.

Unlike past Israeli leaders, Olmert had a limited military background, Wang said, which made him less powerful as prime minister. Meanwhile, Palestinian political parties Hamas and Fatah battled each other for control. Fatah tried to negotiate with the Olmert government, but neither side had the political strength necessary to back any agreement they might have reached. "Even if Olmert had finished his term, he would not have made many achievements," Wang said.

Although Olmert officially resigned on September 21, he will remain as caretaker prime minister until a new government is established.

Livni, 50, has served in the Knesset since 1999 and was a strong supporter of Ariel Sharon, who formed the Kadima Party in 2005. Now she faces several tough challenges, starting with forming a new cabinet, said Hu Shaocong, an expert at the China Institute of International Studies.

Kadima occupies only 29 of 120 seats in the Knesset, which means Livni must find at least one ally party inside the parliament to form the new cabinet. If she fails to do that, Israel might hold an early general election next spring.

On October 13, Kadima and the Labor Party, the No.2 party in the Knesset, agreed to jointly form a new government, pushing Livni closer to her goal. The center-left Labor Party has 19 seats.

According to the agreement, Labor Party Chairman and current Defense Minister Ehud Barak will be the "senior deputy prime minister" in the new government. The next step is for Livni to bring the right-wing orthodox Shas Party into the coalition. With 12 seats, Shas represents Livni's best chance to succeed and become prime minister. If she cannot form a new cabinet by early November, she might lose the general election next spring, Hu said.