Israel's Prime Minister to Step Down Under Fire

Israeli Prime Minister Ehud Olmert on Wednesday capitulated to pressure from his growing corruption scandal and an Israeli public that has turned against him.

Olmert announced he will resign in September, a move that creates new political turmoil in Israel and will likely stall U.S.-backed Mideast peace efforts.

From the Bush administration's point of view, the timing couldn't be worse. The State Department announced Wednesday that Secretary of State Condoleezza Rice is planning to meet this week with Israeli and Palestinian negotiators in a last-ditch effort to lock in some progress in peace negotiations.

On Monday, Olmert told his cabinet that there will be no peace deal by year's end, the target date announced at a U.S.-hosted Mideast peace conference in November. Rice's goal is get both sides to identify the areas where they have made progress, giving President Bush at least a modest legacy despite his limited attention to the Israeli-Palestinian negotiations during his two terms in office.

Although he has consistently denied wrongdoing, Olmert finally succumbed to the growing pressure to resign amid allegations of financial misdeeds, including reports that he pocketed money from various backers. Political analysts have been predicting his resignation since testimony that he took more than $150,000 in cash-stuffed envelopes from a U.S. businessman, Morris Talansky, to support a luxurious lifestyle.

In a televised address from his official Jerusalem residence, Olmert complained that "I was forced to defend myself against relentless attacks from self-appointed 'fighters for justice' who sought to depose me from my position, when the ends sanctified all the means."

Olmert, who could have served until 2010, said he would not run in his Kadima party's primary election, set for September 17, and will step down afterward to allow his party's new leader to form a new government.

The main candidates to lead Kadima are Foreign Minister Tzipi Livni and Transportation Minister Shaul Mofaz, a former defense minister and military chief of staff. Polls show Livni with an advantage in the primary. If she were to succeed Olmert, she would become Israel's second female prime minister, after Golda Meir.