More than 100,000 people filled Tel Aviv’s Rabin Square tonight demanding the resignation of Ehud Olmert, Israel's Prime Minister, after a harsh government report criticised his handling of last summer’s war in Lebanon.

But as the public backlash against the beleaguered premier intensified, political pressure for him to resign appeared to wane.

Mr Olmert managed to rally the support of a majority of MPs from his centrist Kadima party, staving off the prospect of a putsch led by Tzipi Livni, his deputy minister, who on Wednesday openly called for his resignation and positioned herself as the leading contender to replace him.

Ms Livni’s political gamble appeared to backfire. Instead of defecting, Mr Olmert’s Kadima MPs closed rank around their leader, fearing a sudden change in leadership would trigger a snap election in which the party was likely to loose support to right-wing Likud, which leads in the polls.

Critics accused Ms Livni of hypocrisy for holding onto her own parliamentary seat while asking Mr Olmert to step down.

Aluf Benn, a leading Israeli columnist for the newspaper Haaretz, wrote she came across “as an opportunistic and spineless politician who sold out just to keep her seat in power”.

This morning, the Foreign Minister found herself in an awkward position – sitting silently next to Mr Olmert as he sailed through a special parliamentary session held to discuss the findings of the Winograd Commission, the government inquiry examining last summer’s war.

Some of the Prime Minister’s aides have said he intends to dismiss Ms Livni for her disloyalty. Others hinted he would punish her by freezing her out of future decision-making.

Emerging from the Knesset chamber, Ms Livni defended her actions: “I contemplated resigning, but eventually changed my mind,” she said.

“There is no certainty that had I quit, the Prime Minister would have resigned as well,” she explained.

Meanwhile, Mr Olmert emerged with his leadership intact after obtaining the support of 26 of his caucus’ 29 members, and promising he would “fix” the failings identified by the Winograd panel.

Kadima’s ruling coalition with the leftist Labour Party also appeared stable with Amir Peretz, its leader, refusing to resign over criticism that his inexperience as Defence Minister undermined Israel’s war effort.

Even after a series of fiery speeches in the Knesset calling on the two men to resign, their political rivals stopped short of calling for a vote of no-confidence, which was likely to flounder.

“Our country needs new leadership,” said Benjamin Netanyahu, the leader of the right-wing Likud party. “Those who failed at war cannot be those who correct the failures… We have to go back to the people and allow them to express themselves.”

Recent surveys show that between 65 and 68 per cent of Israelis want Mr Olmert to resign, and that only 6 per cent believe he is capable of carrying out the functions of his office.

The massive turnout at the rally in Rabin Square underlined the public’s growing frustration with Israel’s leaders. Protesters waved Israeli flags and carried placards calling for “Elections Now”. Others read: “Failures Go Home”.

Mr Olmert is choosing to ignore the polls and the public protests, according to his aides. “The Prime Minister cannot react to polls and demonstrations,” Tal Silberstein, one of Mr Olmert’s senior advisors told army radio.

While it appears the Prime Minister has survived this latest of his leadership, he faces a daunting road ahead, prompting many analysts to predict his days are numbered.

“The questions isn’t whether the Prime Minister’s career will come to an end, but when,” said Yaron Ezrahi, a professor of political science at Hebrew University. Mr Peretz’s leadership of Labour is on the line in a May 28 party primary, where he is expected to loose his post.

The new Labour leader is likely to be either Ehud Barak, a former Prime, or Ami Ayalon, an ex-admiral who has already promised to pull Labour out of the coalition government if he wins, forcing its collapse.

The government also faces the Winograd Commission’s final report in August. The panel has hinted its conclusions will contain personal recommendations that could explicitly call for Mr Olmert to resign.

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