By IPS Correspondents
JERUSALEM, Jun 26 2008 (IPS)

Embattled Israeli Prime Minister Ehud Olmert won yet another reprieve this week, just hours before the parliament was set to vote to dissolve itself in a move that would almost certainly have led to new elections and Olmert’s ouster from office.

But the prime minister’s latest escape had a price: to head off the threat of early elections Olmert was forced to agree to a leadership run-off in his ruling centrist Kadima party by no later than Sep. 25. The prime minister’s accession to this demand by Labour Party leader and Defence Minister Ehud Barak meant that Labour withdrew its backing for a bill that would have set in motion the disbanding of parliament and would have likely led to early elections.

The Olmert-Barak deal, which was concluded in late-night negotiations mid-week, means that Olmert’s government remains intact for now, and ensures there will not be a general election this year. The conventional wisdom in political circles had been that Israelis would be heading to the polls in November – a full two years ahead of the scheduled 2010 date. But without Labour’s support the bill to dissolve parliament, which was to go to a vote Wednesday, lacked a majority and was withdrawn.

The latest political crisis began several weeks ago when Barak called on Olmert to step down in the face of corruption charges. Olmert is being investigated over allegations he received hundreds of thousands of dollars in cash from Morris Talansky, a U.S. businessman.

Last month, Talansky told a Jerusalem court that he had given Olmert around 150,000 dollars, much of it in cash-stuffed envelopes over a 15-year period before he became prime minister, to cover, among other things, hotel rooms, a family trip to Italy and the upgrading of flights from business to first class.

Olmert has denied any wrongdoing, insisting that the money went to cover campaign debts, not his own personal needs. He has said he will resign if he is indicted.

But Olmert certainly doesn’t want elections. Neither does Barak. While he has been under intense public and political pressure to support elections because of the corruption allegations against the prime minister, Barak is not eager for an early poll, especially with former prime minister Benjamin Netanyahu, the leader of the centre-right Likud party, holding a considerable lead in opinion surveys.

Now, Barak has got what he wanted: Kadima will choose a new leader in September, who could try to reconstitute a government with the centre-left Labour Party. But, there is no guarantee that the new leader will be able to form a governing coalition, and there is also the possibility that Olmert will refuse to step aside.

The prime minister could also decide to compete in the leadership primary. Kadima members, however, believe that he will not run and that even if he intimates that he will, this is simply a ploy meant to ensure he is not perceived as a lame duck prime minister.

Angry opposition MPs, who had sniffed early elections, slammed the Olmert-Barak deal. “Barak growled like a Doberman and ended up like a poodle wagging his tail to his master, Olmert,” said an incensed Likud lawmaker Silvan Shalom.

Tzahi Hanegbi, a member of Kadima and the man credited with brokering the compromise deal, was triumphant: “Barak and Olmert and all those who took part in the talks displayed national responsibility and commitment to the government’s stability,” he crowed. “When we signed the agreement we felt a new leaf was opened in coalition relations.”

With elections off the agenda for now, Olmert has bought himself several months of quiet. But few believe that the prime minister, who has never fully recovered from the 2006 Lebanon war which the public believes he mismanaged, will govern the country until November 2010. There is already some chatter in political circles of elections in March next year.

Olmert, though, still seems to be hoping for some dramatic event that will salvage his political career. The prime minister’s aides have intimated that his lawyers will undermine Talansky’s testimony when they cross-question the businessman on Jul. 17, and that this will help restore public trust in Olmert.

But it will require a dramatic turn of events to convince the public that Olmert can deal with the corruption charges against him and at the same time contend with a host of complex diplomatic and security issues, including peace talks with the Palestinians and Syria, a shaky truce with Hamas in Gaza, negotiations over a prisoner swap with Hezbollah and Hamas, and the challenge posed by Iran’s nuclear programme.

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