Olmert expected to step down on Sunday

Prime Minister Ehud Olmert is expected to step down from office on Sunday. He will make the announcement at the weekly cabinet meeting and then formally tender his resignation to President Shimon Peres.

The exact date of Olmert's meeting with the president has yet to be set, and may only take place after Peres returns from New York, where he is scheduled to deliver an address at the UN General Assembly.

The Kadima primary elections kicked off in late July after Olmert announced his decision to step down amidst a tidal of corruption allegations and police inquiries.

"I'm just a spectator," Olmert said then of the primary race. "We have some excellent candidates, and I promise whoever is elected my full cooperation." He stressed that the "transfer of power will take place in a responsible and statesmanlike fashion – as I have tried to conduct myself in office."

Olmert called the winner of the Kadima primary elections and his successor, Foreign Affairs Minister Tzipi Livni late Tuesday night to congratulate her on her win. The two discussed a meeting in the near future and the prime minister pledged to cooperate fully with Livni.

Olmert's resignation will entail the resignation of the government in its entirety. The responsibility for the next move will be on President Peres. After holding consultations with representatives from the

various political factions in the Knesset, Peres will be required to task one of the MKs with establishing a new government.

Most chances are that individual will be Livni, as chairman-elect parliament's largest political party.

In any event, Defense Minister Ehud Barak, who is also chairman of the Labor party and Olmert's key coalition ally, cannot be called upon to form a government because he is not an elected member of the Knesset.

The MK tasked with the mission will have 28 days to cobble together a stable government. The president can extend the allotted time by an additional 14 days. If his first choice is unable to deliver a government

in time, Peres will then choose another MK, who will also have 28 days.

If the second MK tasked with the job cannot form a government and the Knesset Speaker believes no majority can be reached – the elections will be pushed up and held within 90 days.

If Livni, as party leader can form a coalition, Israel could have a new government in October. If not, an election campaign could take several months. Olmert would remain in office until a new premier is chosen, heading a caretaker government even after he submits his resignation to Peres. The process could extend into 2009.

Amnon Meranda, Roni Sofer and Attila Somfalvi contributed to this report