Olmert Steps Down - Now What?

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JERUSALEM, Israel - Israel's Prime Minister Ehud Olmert formally resigned Sunday in the wake of corruption charges against him. Now, Israel must choose a new leader. And it may not be easy.

Click play to view John Waage's report from Jerusalem and for an interview with Chris Mitchell, the CBN Jerusalem Bureau chief.

Olmert notified his cabinet Sunday and then made the short drive to the president's house in Jerusalem where he submitted his resignation to Shimon Peres.

As president, Peres must choose someone to try to form a new government.

On Monday evening, following a day of consultations with heads of all the nation's political parties, Peres made it official by chosing Foreign Minister Tzipi Livni, just elected to chair the ruling Kadima Party, to form the new government.

After handing her the folder with the official document, Livni responded by saying, "I agree to take upon myself the role of forming a new government." She has 42 days -- excluding the Jewish fall holidays -- which gives her until November 14 to form a new coalition.

Olmert's time in office was marked by Israel's failure to defeat Hezbollah in the second Lebanon war two years ago and last year's Hamas takeover of the Gaza Strip.

It was also a time of extended talks with the Palestinian Authority to pursue a two-state solution, one that includes Israel's giving up most of the west bank and parts of Jerusalem.

Netanyahu Calls for Elections

Opposition leader Benjamin Netanyahu doesn't believe Livni and the Kadima Party deserve to run the government. He wants new elections because polls show he would be the next prime minister.

Meanwhile, Olmert faces possible indictment for two of six investigations against him. But until a successor is chosen, he'll remain in office.

"Of course, in the interim period there cannot be a vacuum and the government of Israel will keep functioning with Prime Minister Olmert still running the government," said Mark Regev, the prime minister's spokesman.

The next prime minister will have to deal with a missile buildup in Lebanon and Gaza, and perhaps the greatest threat in Israel's history: a nuclear Iran.

It's an inconvenient time to have a government in transition, but if Livni is unable to build a coalition, that transition could take months.

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