New Kadima leader Tzipi Livni faces numerous challenges in her bid to become Israel's prime minister - battling for parliamentary support and seeking to move the peace process forward.

A first priority for the 50-year-old foreign minister is to ensure the unity of the governing party whose leadership she won on Wednesday over her closest rival by a mere 431 votes.

"Considering the results and the narrow lead over [Transport Minister] Shaul Mofaz, it will be tough to guarantee stability within Kadima," said political analyst Avraham Diskin of Jerusalem's Hebrew University.

"She should never forget that in Israel, consensus over a leader is extremely rare, or even nonexistent, and always fragile," he said.

As soon as the outcome of the vote was announced at dawn on Thursday, Livni called on party members to close ranks.

"We will unite Kadima and walk together. From today onward we are together and that way we will remove the uncertainty," she said in her victory speech.

She planned to hold talks on Thursday with the three ministers she defeated in the vote to replace scandal-plagued Prime Minister Ehud Olmert as party leader that put her on track to head the government, provided she garners enough parliamentary support.

For Friday, Livni scheduled meetings with members of other political parties to launch coalition negotiations.

Livni will certainly be asked to define her positions on the "Iranian nuclear threat", Middle East peacemaking efforts and other crucial issues, said Inbar.

The Israeli-Palestinian peace process is expected to be a particularly thorny issue.

Religious party Shas has already said it would not be part of a government that is willing to negotiate the future of annexed east Jerusalem, which Israel considers part of its "eternal and undivided" capital and the eastern part of which Palestinians want as the capital of their future state.

Jerusalem is one of the major sticking points in the peace negotiations, and Shas could play the role of kingmaker in Livni's attempts to form a government coalition and avert snap elections.

"A few weeks of wholesale give and take with the sly Shas foxes will be enough to crack her Mother Theresa image and to send Livni, beaten, tarred and feathered, in the event of failure, into general elections," the Israel Hayom daily said in an editorial.

Livni's rivals say she lacks security experience, a view shared by some pundits.

While she has been in politics for a decade and foreign minister for two years, Livni "has never been at the centre of Israel's major conflicts, and no one knows how she would manage a crisis with Iran, negotiations with Syria or the possibility of a third Intifada," said political analyst Daniel Bensimon.

Analysts also pointed to the question of her eventual relationship with a new US administration and ability to deal with the spin-offs of the global financial crisis, which could have a negative impact on an Israeli economy that has been growing healthily over the past four years.