CONTINUITY OF ISRAELI GOVERNMENT LEADERSHIP

1. The powers of the Prime Minister have been transferred
to Kadima minister Ehud Olmert in his capacity as Alternate
Prime Minister, in accordance with Israel's Basic Law.
Should Sharon die, Olmert is almost certain to be chosen as
acting prime minister to serve until the forthcoming
elections. Olmert chaired his first cabinet meeting on
January 5, and government ministers and party leaders across
the political spectrum are urging stability and continuity.
While the Basic Law permits postponement of the elections
during an emergency, no serious calls have been heard urging
such action. If the Prime Minister dies, the Government is
deemed to have resigned on the day of his death. No
indications exist, however, that Olmert's caretaker position
will be challenged in advance of the scheduled March 28
elections.



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THE ATTORNEY GENERAL APPLIES THE LAW


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2. Attorney General Meni Mazuz has confirmed the
applicability of Article 16 [B] of the Basic Law: the
Government. This article states that when a prime minister
is temporarily unable to fulfill his function, his duties
are to be carried out by the alternate prime minister for a
period of 100 days. If after that period the PM has not
returned to office, he is deemed to be permanently incapable
of doing so and the government is considered to have
resigned on the following day. Since elections have already
been called for March 28th, that becomes the governing date,
unless a move, highly unlikely, is made to postpone
elections. In the event of the Prime Minister's permanent
incapacitation or death, a separate provision of law
requires the government to choose an acting prime minister
from among the ranks of the ministers -- five in this case -
- who are members of the incapacitated prime minister's
Knesset faction: Kadima. Under that configuration, Olmert
remains the most likely choice, and at this point all
parties are calling for stability.



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OLMERT CONVENES THE CABINET


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3. The Attorney General's decision cleared the way for a
swift transfer of powers to the Alternate Prime Minister
prior to the start of the marathon surgery on Prime Minister
Sharon. Olmert held a Cabinet meeting January 5 in which
the Attorney General reviewed the special circumstances
created by the Prime Minister's hospitalization. Diplomatic
sources were widely quoted by the electronic media as saying
the purpose of the Cabinet meeting was to signal stability
and continuity. Addressing the ministers, Olmert underscored
the resilience and strength of the state of Israel, which he
said would see the nation through "this difficult time."
Olmert later spoke with Bank of Israel Governor Stanley
Fisher and the two agreed that macro-economic policy as well
as budgetary and monetary policy would continue.



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RALLYING BEHIND A COMMON INTEREST


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4. All the indications at this stage are that the major
political players recognize a common interest in fostering
stability and maintaining continuity of government. The
clearest expression so far was given by Likud Party Chairman
Binyamin Netanyahu, who announced that, for now, he will not
be pulling his party's ministers out of the government at
the week's end as he had earlier intended. Netanyahu did not
elaborate on the decision, but it clearly eases Olmert's
administrative burden. Kadima's minister of justice, Tzippi
Livni, told the Cabinet meeting that she would do everything
she could to assist Olmert in his caretaker role, and that
all ministers would do likewise. Statements of support for
Olmert and offers to be of assistance have come from Likud
Foreign Minister Sylvan Shalom, Labor party chairman Amir
Peretz, and Shinui party leader Yossef Lapid. Shas leader
Eli Yshai said this was not the time for political changes.

JONES