With Deal, Olmert Averts Rebellion by Partners

JERUSALEM, June 25 -- Israeli Prime Minister Ehud Olmert bought himself more time in office Wednesday, fending off a rebellion by coalition partners who had threatened to bring down his government if he did not resign over a burgeoning corruption probe.

But in exchange for keeping his coalition together temporarily, Olmert was forced to allow internal elections in his centrist Kadima party by late September. Rivals within Kadima are already jockeying for his job, and it is unclear if Olmert will even run.

Olmert has been fighting for his political life for nearly two months, since allegations surfaced that he had taken hundreds of thousands of dollars, much of it in cash, from a New York businessman.

The prime minister has denied all wrongdoing, but testimony last month by the businessman, Morris Talansky, was considered especially damaging, and Olmert has since faced calls from erstwhile allies to step aside.

The most serious challenge to his authority has come from Defense Minister Ehud Barak, who leads Kadima's largest coalition partner, the center-left Labor Party. Barak had vowed to support a bill to dissolve the Israeli parliament, the Knesset, in a vote that was scheduled for Wednesday. With Labor's support, the bill would almost certainly have passed. But the showdown was averted by a last-minute deal in which Kadima agreed to a party primary within three months.

Olmert's term is slated to run until 2010, but if he sits out or loses the primary, it would effectively end his 2 1/2 -year-old premiership. It would also probably trigger new elections. But neither Kadima nor Labor is thought to want that, since polls show the right-wing Likud Party beating them both.

Olmert is hoping the extra time he won Wednesday will give him the chance to exonerate himself in court before any decisions are made about his political future. Talansky's cross-examination, scheduled for mid-July, is considered critical to that effort. Olmert is also hoping to push forward with a flurry of diplomatic initiatives, including negotiations with the Palestinians and Syria.

"We have stability for the coming months," said Olmert's spokesman, Mark Regev. "There are very serious issues on the table, and we now have the time to move forward."

Talks with the radical Islamist group Hamas, mediated by Egypt, have already borne fruit in the form of a six-month cease-fire in the Gaza Strip. That truce was rattled Tuesday, however, when the armed group Islamic Jihad fired three rockets from Gaza into southern Israel in response to an Israeli operation in the West Bank city of Nablus that left two of the group's members dead.

In retaliation, Israel on Wednesday closed all commercial crossings into the coastal strip and would not say when they would reopen. Under the terms of the truce, Israel is supposed to gradually loosen the strict economic embargo it imposed a year ago, when Hamas toppled a unity government with the rival Fatah party and took control of the territory.

Hamas said Israel's decision to close the crossings violated the terms of the truce. But the group also said it planned to continue to honor the week-old cease-fire, and by refraining from a military response, Israel indicated that it would, as well.

The truce is controversial in Israel and Gaza, with hard-line critics on both sides arguing that now is not the time for quiet.

Retired Lt. Gen. Moshe Yaalon, a former chief of the Israel Defense Forces, said that instead of holding its fire, Israel should be conducting targeted killings and medium-scale military operations so that, ultimately, Hamas "will cry for [a truce] without conditions."

But Yaalon said he doubts the current cease-fire will last.

"It's not a stabilized situation, and it's not going to last for six months," he said.