I.  The Olmert Announcement

Prime Minister Ehud Olmert announced two things on Wednesday:  First, he announced that he will not run for the leadership of his party, Kadima, in elections scheduled to be held in 6 weeks. Second, and more importantly, he announced that he will resign as prime minister once Kadima elects its new leader.

What this means is actually far more complicated that it might sound.

First, what is certain is that because Olmert will not be a candidate for the leadership of Kadima, the scheduled elections will mean a new leader will take over the party as of mid-September or early October.  This will, in practice, transform Olmert from a regular prime minister into the head of a transitional government.

Second, while Olmert has said he will resign following the Kadima elections, what this means in terms of his tenure as acting prime minister heading a transitional government is uncertain.  Due to quirks of Israel's political system, Olmert could be replaced as early as mid-October 2008, or he could stay in office through mid-2009.

Here are the possible scenarios that could follow September's Kadima primaries:

The first round of the primaries is scheduled for September 17. Because at least four members of Kadima are expected to compete, the likelihood of a second round runoff is high. It is scheduled for September 25. The two current frontrunners are Foreign Minister Tzipi Livni and Transportation Minister (and former defense minister and IDF chief of staff) Shaul Mofaz. The latest polls show them to be neck-and-neck.

The winner of the primaries is expected to be assigned by President Shimon Peres with the task of forming a government coalition. At that point, he or she will have 28 days (with a possible extension of 14 days) to put together a coalition.

The new leader of Kadima may put together a coalition that resembles the current one (Kadima-Labor-Shas). It is also possible that she or he will try to form a right-wing coalition with Likud and even Israel Beiteinu. While some in Kadima have talked about their desire to include both Likud and Labor in the new government, Likud has already announced that it would rather push for new elections.

If the new leader of Kadima forms a coalition within the 42 days allotted by law, he or she will replace Olmert as prime minister and continue to serve until a new parliament is elected (which could happen as late as 2010).  In this case, Olmert would continue as acting prime minister, heading a transitional government, until the new prime minister was sworn in. A new prime minister could be sworn in as soon as early October if she or he succeeded in forming a coalition swiftly. At the same time, the process could also linger through December.

If, however, Olmert submits his resignation and the new Kadima leader fails to form a coalition, new elections will take place 90 days from the day in which the new leader of Kadima announced his or her inability to form a coalition.  In this case, new elections would be held in early 2009, leaving Olmert and his transitional government in office through April or even May of next year.

II.  What it Means for the Peace Process

Wednesday's announcement has already raised questions about the impact on the peace process – in regards to both the Israeli-Palestinian and Israeli-Syrian tracks.  We are now in a period of political transition in Israel. (The transition actually began months ago, but now there is a somewhat clearer, though still not entirely clear, path forward).  We are also in a period of political transition in the United States, with elections in November set to usher in a new President and Congress.  And the Palestinians are also nearing a period of potential political transition, with President Abbas' regular term in office set to expire in January. (There is a dispute within Fatah, as well as between Fatah and Hamas, over when Abbas' term in office actually ends; some hold that Abbas' term in office only expires in 2010).

Some argue that given all of these transitions, efforts to achieve Israeli-Palestinian and Israeli-Syrian peace will, by necessity, be shunted to the margins; that lame-duck leaders do not have the authority to pursue major initiatives; and that until a new political status quo is established in Israel and the U.S. (and possibly in Ramallah) there is no point in wasting energy on the peace process.

They couldn't be more wrong, because they ignore a simple fact: Israeli – and American – vital security interests are exactly the same after Olmert's announcement as they were before it.

Obviously, now is not the time to convene another Annapolis-style conference or to try to launch a new negotiating track.  But there is no reason to do either.  Serious Israeli-Palestinians talks, and, at a different level, Israeli-Syrian talks, are already underway.   Israel is engaging on both of these tracks because it is in Israel's vital interests to do so.  Abandoning these efforts during this transition would be a major, and unnecessary, setback.

So what should be done during this time of transition?

First, all parties must swear a political Hippocratic oath.  During this period of transition and uncertainty, their guiding imperative must be: do nothing that will harm the viability of the peace process or make it harder for the next government to continue on the path to peace, hopefully toward a successful agreement.

And second, they must re-define the immediate-term expectations and goals of the peace process, for themselves and for their people.  Whatever hope there was that the negotiating process launched at Annapolis last November would achieve its declared goal – a final status agreement, in some form, by the end of 2008 – has now evaporated. Yet, there is still an opportunity for the process that it launched to bear fruit, both in the immediate- and long-term.

This means, Olmert and his government must reject any pressure to cut or diminish negotiations with the Palestinians, or to break off talks on the Syria track.  Rather, Israel must continue forward in seriousness and with good faith, with the goal of handing over to the next government healthy, productive channels that will, by their very existence and momentum, make it incumbent on the next Israeli government to continue on this path.

This also means that Olmert must find the political strength and will to resist pressure to take steps that undermine the viability of the peace process.  It does not take a rocket scientist to know what this means:  expansion of settlements, including in East Jerusalem, must end, and pointlessly provocative initiatives – like establishing a new settlement in the Jordan Valley – must be discarded, and where possible, real action should be taken to improve movement and access in the West Bank.  In addition, Israel must work to bolster, not undermine, one of the most positive and hopeful achievements of the current Israel-PA talks:  the empowering of the newly trained and deployed Palestinian security forces, who have operated with particular effectiveness in bringing law and order in the northern West Bank.  The challenge today is to enhance this security cooperation in order to both improve law and order and fight violence and terrorism.

For the Bush Administration, it means resisting the impulse to give up or opt out.  The Administration came into the Israeli-Arab peace game late, perhaps too late to achieve a peace accord, but not too late to make a difference.  Continued U.S. engagement, including making clear the U.S. desire to see the Israeli-Palestinian track continue, even during this period of transition, is critical.  It is imperative for the U.S. government to make clear that Arab-Israeli peace is a core American national security interest, irrespective of the party of the incumbent U.S. Administration or the character of the ruling Israeli coalition.  The Administration must underscore that any Israeli government is expected to cooperate toward achieving that goal, and that the Administration fully supports the efforts of Quartet Representative Tony Blair in this regard.  Similarly, U.S. pressure on Israel to refrain from taking steps that harm the viability of the peace process will be more important than ever, in tandem with redoubled U.S. efforts to support Palestinian security reform and strengthening of Palestinian security.

For Palestinian leaders, it means resisting the urge to give in to cynicism or despair. President Mahmoud Abbas and his allies must continue to show the Israeli public that there is a serious partner for Israel to negotiate with and that a negotiated two-state solution is feasible.  A rapprochement between Fatah and Hamas could help demonstrate that any deal reached with the Palestinian Authority would be implemented. Abbas and his government must redouble efforts to fight terrorism and continue security cooperation with Israel's defense establishment. Moreover, they must resist public pressure to turn from the path of diplomatic engagement, towards the dead-end of violent "resistance." Abbas and his allies should demonstrate with their words and actions that, whatever the political context in Israel, constructive efforts to build a Palestinian state alongside Israel go on.

In the waning days of both the Olmert Government and the Bush Administration, there is still every opportunity to leave an important and profoundly positive legacy for Israel:  setting the nation on a real path to peace.  Whether or not they do this will depend not on the vagaries of domestic political timetables, but on a demonstration of commitment and leadership by the relevant actors.