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Israeli Prime Minister Ehud Olmert’s approval rating had already plummeted to single digits, and then Monday he was rattled by a high-level government report for his mishandling of Israel’s five-week war with Lebanon’s Hezbollah militia last year. He needs to fortify his position or he won’t be holding it for long.

Olmert vowed not to resign, but his hopes of clinging to power rest more in the reluctance of his coalition partners to risk a new election than in his own popularity. Polls suggest if a new election were held today, opposition leader Benjamin Netanyahu of the hard-line Likud Party might return to power. But Olmert’s own centrist Kadima Party might seek to replace him. If that happened, Israel’s popular foreign minister, Tzipi Livni, would be well positioned to become Israel’s second female prime minister.

Olmert, 61, became leader of the newly formed Kadima after the party’s charismatic founder, Ariel Sharon, suffered a disabling stroke. But Olmert hasn’t matched either his predecessor’s genius on the battlefield or the political intuition that let Sharon parlay his hawkish reputation into a peace initiative.

Olmert was heavily criticized during the struggle with Hezbollah for authorizing disproportionate retaliatory strikes that paralyzed Lebanon’s economic infrastructure without affecting Hezbollah’s ability to strike Israeli civilian targets. The fighting left 1,100 Lebanese dead, mostly from Israeli air raids, and killed 163 Israelis – 43 civilians and 120 soldiers. Hezbollah fired more than 4,000 rockets into Israel before a U.N.-brokered cease-fire was declared Aug. 14.

Financial scandals have also ravaged Olmert. Monday’s report flaying his military leadership came just five days after State Comptroller Micha Lindenstrauss recommended that a criminal probe be opened against the prime minister for aiding an associate seeking state aid for a company. Olmert is also being investigated over allegations he received favorable prices in private real-estate transactions.

The Middle East peace process has been stalled by a combination of Olmert’s weakness and that of Palestinian leaders who are immobilized by the ongoing enmity between the Fatah party and Hamas. Thus, at a time when strong leadership in both Israel and the Palestinian camp is necessary to craft a successful peace initiative, both sides are too preoccupied with internal problems to reach out to their adversaries. It isn’t easy to dredge up any hope until leaders on both sides can stabilize their political fractures.

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