Israeli Prime Minister Olmert faces increasingly precarious tenure

Ehud Olmert's shelf life as prime minister was diminishing rapidly on Wednesday, as his most important political ally called on him to step down amid new testimony indicating that he received stacks of cash from a New York businessman. The ensuing turmoil means the Israeli political system will be embroiled in a leadership search and coalition geometry for months, likely overshadowing hoped-for peace initiatives.

Defense Minister Ehud Barak on Wednesday called on Mr. Olmert to leave office, following a day of deeply damaging, pre-trial deposition in which Morris Talansky, a donor and longtime supporter of Olmert's, acknowledged giving the now-prime minister $150,000, stuffed into envelopes, since the early 1990s. Mr. Talansky said in his testimony that Olmert encouraged him to finance his election campaigns, but that he also helped Olmert stay in luxury hotels, fly first-class, and go on European vacations.

Mr. Barak's press conference at the Knesset on Wednesday afternoon, in which he said Olmert must immediately recuse himself from running the government in order to deal with his personal problems, provided the strongest indication yet that Olmert's longevity as a prime minister is increasingly in peril, and that new elections could be expected to be held soon.

"I do not think the prime minister can run, in parallel, the government and deal with his own personal affairs," said Barak, who is the leader of the left-leaning Labor party, Olmert's major coalition partner, and a former prime minister.

"Out of a sense of what is good for the country and in accordance with the proper norms, I think the prime minister must disconnect himself from the daily running of the government," Barak added. "He can do this in any of the ways open to him – suspension, vacation, or resignation, or declaring himself incapacitated. We will not be the ones to determine this."

Many an Israeli leader has found himself beneath a cloud of suspicion before, and the Israeli police already had several ongoing investigations against Olmert. But never before has a sitting prime minister had a witness give testimony such as Talansky did in his long day in court on Tuesday.

The testimony against Olmert

The businessman, described by local reporters as "coherent" and "reasonable," said he later realized he was "the biggest fool" to keep shelling out cash for Olmert, often paying his debts, and his hotel and flight bills. Olmert, Talansky said, also asked for loans that he promised to repay, but did not.

"I said to myself, 'This is absolutely, absolutely insanity,' " Talansky told the court. "Cash disturbed me. I couldn't understand it, and I accepted the answer simply because I saw something bigger, hopefully, out there."

Talansky said he'd long been a personal admirer of Olmert's, seeing him as a future leader when he was running for mayor of Jerusalem in 1993, and wanted only to help him succeed.

Fresh political uncertainty

But the route forward, in the wake of Barak's call on Olmert to step down or otherwise remove himself from office, is uncertain. Olmert heads the biggest political party, Kadima, which was founded in 2004 by Ariel Sharon as a supposed middle-of-the-road movement. It drew breakaways from Labor and the right-wing Likud, which Mr. Sharon had been a part of for years. After Sharon was incapacitated by health problems, Olmert took over.

But now, more than one person in Kadima would like a chance at the reins. For this reason, the party is likely to move up its primaries, originally slated for November. One likely successor is Tzipi Livni, the foreign minister. But several other heavyweights may pose a formidable challenge.

To the right, former right prime minister Benjamin Netanyahu is calling for early elections, which some believe could return him to power. But other politicians want to avoid a situation that would help catapult Mr. Netanyahu back into office. And, the incumbent shakeup at the ballot box could cause many Knesset members to lose their seats.

"The clock has started ticking and the countdown's on. It doesn't seem possible for Olmert to hang on for an appreciable length of time," says Peter Medding, a political scientist at the Hebrew University of Jerusalem.

"The ball is ... in Kadima's court. They need to be able to decide on someone, and they need to be able to decide on a method for choosing someone," he continues. "It all depends on whether Kadima and senior members of Knesset can be depended on to unify or not."

The left-wing Meretz party, for example, criticized Barak for not putting an ultimatum on Olmert. Others argue that this is implied. If Olmert doesn't step down, the Labor party will bolt and Olmert won't have a governing majority.

Barak, however, is not a member of the Knesset and, therefore, cannot be a candidate for prime minister unless new elections are held.

"Barak's taken a stance," Mr. Medding says. "He's taking the moral high ground for something he can't benefit from today, because as of now, he can't be prime minister."