(Tsafrir Abayov ~ Associated Press)
Olmert said he does not plan to resign, despite the growing number of allies deserting him.
Foreign Minister Tzipi Livni became the highest-ranking official to call for Olmert's ouster, telling him in a meeting that he had lost the public's support and setting herself up to become Israel's second female prime minister, after the legendary Golda Meir.
"I told him that resignation would be the right thing for him to do," Livni told reporters. She had been conspicuously silent since the report on last summer's war came out Monday.
A relative political newcomer and a former officer in the Mossad spy agency, Livni is Kadima's most popular politician. The daughter of an underground fighter in Israel's war for independence, she has quickly risen in politics in recent years and appears to be Kadima's best hope of retaining power.
Livni, 48, presents a stark contrast to Olmert. Perhaps reflecting her history as a young Mossad agent in the 1980s, Livni measures her words and maintains a calm exterior, while Olmert enthusiastically pumps hands and claps backs while letting fly with sometimes costly inexact phrases -- in English and in Hebrew.
This week's report capped a six-month investigation into a war that the Israeli public widely perceived as a failure. The five-member panel, named by Olmert, used exceptionally harsh language, saying Olmert bore overall responsibility and suffered from poor judgment, hasty decision-making and shortsightedness.
The report has prompted widespread calls for Olmert's resignation, both from political rivals and in the media. Opinion polls have shown some two-thirds of the public want him to step down.
A poll published Wednesday in the Maariv daily showed that 73 percent felt Olmert should resign, and only 17 percent said he should remain in office. The poll questioned 501 Israeli adults and had a margin of error of 4.6 percentage points.
At her news conference, Livni said she would remain in the government and would not actively work to oust Olmert. But she said he should voluntarily leave office, and that she considered herself the rightful successor to lead the Kadima Party. Livni also said she did not want to see the government dissolved and opposed early elections.
"I haven't worked and am not working to topple the prime minister. That's a decision he'll have to make," she said. "It's not a personal matter between me and the prime minister -- this issue is more important than both of us."
Under Israel's parliamentary system, Kadima could change leaders without losing power. The prime minister is not directly elected and usually comes from parliament's largest bloc.
Opinion polls have shown that the hard-line former prime minister, Benjamin Netanyahu of the opposition Likud Party, would win if new elections are held. Netanyahu served as Israel's leader from 1996-1999, rebuffing pressure to make concessions to the Palestinians and employing especially harsh rhetoric about dangers facing Israel from Palestinian and other Arab extremists.
Netanyahu, who was educated in the United States and is popular there as a speaker explaining Israeli policy, is poised to make a comeback at the head of a coalition of hawkish parties, taking advantage of the expected crash of the centrist Kadima and failure of the dovish Labor to inspire support.
Last year's war erupted July 12 when Hezbollah guerrillas crossed into Israel, killing three soldiers and capturing two.
In 34 days of fighting, Israel failed to achieve the two main goals Olmert set: to return the soldiers and crush Hezbollah. Instead, Hezbollah fired nearly 4,000 rockets into northern Israel.
Nearly 160 Israelis and more than 1,000 Lebanese died in the fighting, and Israeli soldiers returned from battle complaining of conflicting orders and shortages of food and ammunition.
Since the report was issued, Olmert has been scrambling to hold his coalition together. One minister from the Labor Party, Olmert's main coalition partner, quit Tuesday, and three members of parliament from Kadima have demanded he step down.
At an emergency meeting of Kadima called after Livni's news conference, Olmert pledged to stay in office.
"I intend to implement the recommendations of the (war) report down to the last detail," spokesman Jacob Galanti quoted him as saying.
Cabinet minister Meir Sheetrit said the meeting was calm, and there were no harsh words between Olmert and Livni. "Most of the party caucus supports the prime minister, and there is no reason to think that the prime minister is going to resign," he said.
Olmert opened a special Cabinet session earlier Wednesday by hinting that reports of his political demise were premature.
At her news conference, Livni said she would remain as foreign minister "to ensure that improvements are carried out." Party officials said Olmert did not plan to fire her.
However, it was unclear how she and Olmert would be able to continue working together.
Although Kadima could replace Olmert without elections, Livni could encounter difficulty in keeping the current coalition together. The ultra-Orthodox Shas party would have difficulty serving under a woman, while the nationalist Yisrael Beiteinu Party may be wary of cooperating with Livni, who is more dovish than Olmert.
Kadima was formed by then-Prime Minister Ariel Sharon after he despaired of persuading his longtime Likud faction of making further territorial concessions following Israel's unilateral pullout from the Gaza Strip. Sharon suffered a stroke in January 2006 and remains in a coma.
Reuven Hazan, a political scientist at the Hebrew University of Jerusalem, said Livni's challenge would have been worse had she threatened to resign or bring down the government.
"We see a ball rolling, but a ball that could have taken on a lot of momentum today has slowed down," he said. He noted that Olmert's opponents plan a demonstration Thursday in Tel Aviv and said the turnout could determine whether the momentum against Olmert continues to grow or fizzles out.
AP writer Laurie Copans contributed to this report.