Former Israeli PM Barak poised for comeback

JERUSALEM, May 28 (Reuters) The leadership of a party key to keeping embattled Prime Minister Ehud Olmert in office was up for grabs today in an election that could mark the political comeback of one of Israel's best known figures.

Ehud Barak, who as prime minister from 1999 to 2001, held unsuccessful peace talks with the Palestinians and Syria, seemed slated for a strong showing in the Labour Party vote.

Opinion polls named Barak and Ami Ayalon, an ex-admiral who headed Israel's Shin Bet secret service, as leading candidates to defeat the party's current chairman, Defence Minister Amir Peretz, whose low popularity ratings rival Olmert's.

But it was unclear whether any candidate could garner the 40 per cent of the vote necessary to avoid a run-off. Polls close at 2100 hrs (local time), with official results expected by early tomorrow.

Centre-left Labour serves as Olmert's main partner in a coalition government led by his centrist Kadima party. Its defection would likely spell an early general election.

Both Barak, who worked as an international business consultant over the past several years, and Ayalon want to keep the coalition intact.

But Ayalon has called for Olmert's immediate resignation over an official inquiry's findings that he had rushed rashly into last year's costly Lebanon war after Hezbollah guerrillas abducted two Israeli soldiers in July.

Peretz, also roundly criticised by the Winograd Commission's interim report into the conflict, has said he would step down as defence minister regardless of the Labour ballot's results.

Israel's next general election is slated for 2010.

''Whoever is elected (by Labour) will apparently have to be defence minister for a certain period, deal with the Iranian nuclear programme, remove the Qassam rocket threat without entangling Israel in a multi-casualty war, rehabilitate the army and prepare for elections,'' political commentator Nahum Barnea wrote in the Yedioth Ahronoth newspaper.

''Compared to these tasks, today's election is a walk in the park,'' he said.

ROCKET ATTACK To the sound of a siren signalling an incoming rocket from nearby Gaza, Peretz voted in his hometown of Sderot.

''Friends, calm down ... It's OK,'' Peretz told a crowd at a polling station.

The rocket, one of more than 250 that Hamas and other Palestinian militant groups have fired at southern Israel from Gaza since a surge of cross-border fighting began on May 15, landed harmlessly in an open field.

Israeli air raids in Gaza over the past two weeks have killed nearly 40 Palestinians, most of them militants. Hamas's armed wing has vowed to continue the rocket attacks and ''chase the occupation's soldiers and settlers from every inch of Palestine''.

Israel has held back from a wide-scale ground operation in Gaza, aware that such an assault could be costly in a territory where militants have built tunnels and booby-traps and operate from within heavily populated areas.

REUTERS NY VV1513