ISRAEL’S Prime Minister-elect last night offered to restart negotiations with the Palestinians, after exit polls showed his centrist Kadima party set to form the next government.

In a late-night victory speech Ehud Olmert spoke of a new chapter in Israel’s history, offering peace to its enemies and uniting internal divisions.

Just four months after the party was formed by Ariel Sharon – to whom Mr Olmert paid fulsome tribute – Kadima was predicted to win 28 seats after votes were counted in 50 per cent of polling stations, according to Israel Channel 10 Televison.

The centre-left Labour party came second, winning 20 seats, leaving Mr Olmert the possibility of heading a centre-left coalition with more than half of the Israeli parliament’s 120 seats.

In a major blow for Binyamin Netanyahu, the former prime minister and anointed heir to Mr Sharon until last year, his divided and bickering Likud Party was reduced to a right wing parliamentary rump, predicted to win just 12 seats.

In words clearly directed at Mahmoud Abbas, the Palestinian President, Mr Olmert said: “We are prepared to compromise, give up parts of our beloved land of Israel, remove, painfully, Jews who live there, to allow you the conditions to achieve your hopes and to live in a state in peace and quiet.”

The election was widely seen as a referendum on Mr Olmert’s policy of unilateral separation from the Palestinians and his intention to impose permanent borders for the Jewish state.

But last night he shifted the tone, emphasising his willingness to negotiate any agreement rather than to impose it. “The time has come for the Palestinians . . . to relate to the existence of the state of Israel, to accept only part of their dream, to stop terror, to accept democracy and accept compromise and peace with us. We are prepared for this. We want this,” he said.

But amid the euphoria – and despair on the Israeli right – Hamas sounded a discordant note.

Ismail Haniya, Hamas’s Prime Minister-designate, warned that Israel could not be permitted to annex parts of the West Bank, which it has held under military occupation since 1967. “We said from the beginning that any Israeli step that will impose facts on the ground or undermine Palestinian rights, such as creating so-called temporary borders, is rejected and unacceptable policy,” said Mr Haniya.

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