Ehud Olmert survived the latest challenge to his leadership yesterday, but his days as the Israeli Prime Minister appeared to be numbered after he was forced to submit to an internal party ballot in the autumn.

In a last-minute deal to avert early elections, Mr Olmert’s Kadima party promised to hold internal party primaries before September 25. Mr Olmert could choose to run for re-election as party leader but his current unpopularity and the numerous corruption allegations made against him make this unlikely.

The deal with the Labour party, the coalition partner of Mr Olmert, was struck less than ten hours before the Knesset was to begin deliberations on an opposition Bill to dissolve parliament, forcing early elections in the autumn.

Labour, led by Ehud Barak, the Defence Minister, and Kadima, had sought to avoid early elections, with opinion polls showing the right-wing Likud party, headed by the former Prime Minister Binyamin Netanyahu, ahead.

The dissolution of the Knesset would have undermined the Government at a time when Mr Olmert is trying to meet a US deadline for a peace accord with the Palestinians, pursue Turkish-mediated talks with Syria, arrange a prisoner swap with Hezbollah in Lebanon, cement a ceasefire in Gaza and monitor the nuclear programme in Iran.

In his speech to the Knesset after the backroom deal was struck, Mr Olmert pleaded for more time to see out the Government’s diplomatic agenda. “The current negotiations for peace, every negotiation we embark upon, are vital. We have been demonised as selling out. The truth is that the opposition is not interested in peace,” he said.

The deal sparked outraged comment from voters and analysts. Radio shows were swamped with callers berating Mr Olmert and Mr Barak for acting purely out of self-interest.

“The public has demanded elections, but our leaders are selfish, and care only about saving their own skin,” said Pnina Mizrachi, one caller, from Tel Aviv. Hanan Cristal, a political commentator with Israeli public radio, said that Mr Olmert had lost popular legitimacy.

The Prime Minister has been fighting to save his political career for nearly two months, ever since allegations that he had received more than $150,000 (£75,000) from Morris Talansky, a New York financier. Kadima had announced already that it would wait until the cross-examination of Mr Talansky was complete before announcing the date of the primaries but several figures are already lining up.

The current front-runner is Tzipi Livni, the Foreign Minister, who has played a role in many of Israel’s diplomatic initiatives. She was the only party member to call openly on Mr Olmert to stand down after a commission criticised the Government over the 2006 Lebanon War, but she lost some credibility by remaining in his Government.

Other contenders include Shaul Mofaz, the Transport Minister and a former army chief, Meir Sheetrit, the Interior Minister, and Avi Dichter, the Public Security Minister and a former security service chief.

Mr Olmert’s flurry of diplomatic initiatives have led to a six-month ceasefire with Hamas, the Islamists who control the Gaza Strip. That truce was shaken on Tuesday when three rockets were fired by the militant Islamic Jihad group into southern Israel. Islamic Jihad members said that they were responding to an Israeli military operation in the West Bank city of Nablus that killed two of their members. In retaliation, Israel closed all commercial crossings leading to the Gaza Strip indefinitely yesterday.

Under the terms of the truce, Israel is supposed to loosen gradually the strict economic embargo that it imposed a year ago when Hamas took control of Gaza. Israel insists on a complete cessation of fire from Gaza.

Major Peter Lerner, a spokesman for the Israeli government agency that deals with Palestinian civilian affairs, said that if the calm continued overnight the crossings would probably reopen today.

In another move, the Israeli Cabinet is set to vote on Sunday on a proposal to exchange prisoners with Hezbollah militants in Lebanon.

Times Recommends

• 'New York has lost its edge'
• Copenhagen will fail – and quite right too
• More than 17,000 new underwater species found