Livni starts coalition talks

Israeli Foreign Minister Tzipi Livni began talks on forming a new coalition government yesterday after edging home in a party leadership contest that set her on course to replace Ehud Olmert as Prime Minister.

Among those she spoke with by telephone was US Secretary of State Condoleezza Rice, who hopes Ms Livni and Mr Olmert can still clinch some form of peace deal with the Palestinians before the Bush administration quits the White House in just four months.

Palestinian negotiators welcomed her election in Wednesday's poll, though they hold out little hope of a major breakthrough.

Ms Livni, a lawyer and former Mossad agent, faces other battles - to stave off an early parliamentary election that she would probably lose and to build a multi-party Cabinet on the remains of the fractious administration Mr Olmert will leave behind when he finally steps down under the weight of a corruption inquiry. Mr Olmert is determined to go on handling talks with the Palestinians as caretaker premier until Ms Livni forms a new team. The woman who would be Israel's first female leader since the redoubtable Golda Meir in the 1970s said after her narrow win in the Kadima party ballot that her priority was "stability".

Ms Livni, 50, began what could be a weeks-long process of forging new coalition agreements by meeting two of the men she beat to the leadership of Kadima, a centrist party founded just three years ago by Ariel Sharon and which is the biggest group in a fragmented Israeli Parliament with only 29 of 120 seats.

Analysts say that holding Kadima itself together could be as big a challenge as cutting deals with other coalition parties.

Aides said Ms Livni would meet her closest Kadima rival, former general Shaul Mofaz, today. Mr Mofaz stunned her supporters overnight when a protracted count defied exit poll forecasts of a double-digit winning margin for the foreign minister.