Prime minister of Israel resigns

Israeli Prime Minister Ehud Olmert resigned Sunday amid a series of corruption inquiries, beginning a leadership transition that could take weeks and possibly months.

Olmert handed a resignation letter to President Shimon Peres, who is expected to assign Foreign Minister Tzipi Livni the task of forming a governing coalition. Livni is the new leader of the ruling Kadima party and hopes to succeed Olmert.

An early sign of the challenges she faces was a meeting Saturday night between Defense Minister Ehud Barak, leader of the Labor Party, and opposition leader Benjamin Netanyahu, who heads the rightist Likud Party. Netanyahu has been calling for new elections, and the meeting suggested that the two were coordinating their positions.

The tight margin of Livni’s victory in the Kadima party primary last week -- little more than 1% -- is seen as having reduced her leverage and weakened her mandate to lead without a national vote.

If Livni fails to cobble together a coalition in 42 days, elections are to be held 90 days later. Olmert is to remain in his post as caretaker prime minister until a new government is formed.

Announcing his resignation at a meeting of his Cabinet, Olmert promised that he would help Livni “with all my might to form a government.” But Livni will have to bargain hard with potential partners over a range of demands.

The ultra-Orthodox Shas party, a key player with 12 seats in the 120-seat legislature, is demanding a sharp increase in child welfare allowances to meet the needs of its constituents, many of whom have large families, and it wants Jerusalem excluded from the agenda of peace negotiations with the Palestinians.

Livni, the lead Israeli negotiator with the Palestinians, is committed to resolving all the core issues in dispute, including the future of Jerusalem. And any budget increase for Shas could run into resistance from Labor and within Kadima.