In a surprise press conference, Mr Olmert said he could not adequately defend himself against an ongoing police investigation, and therefore would not contest his Kadima party's leadership race on Sept 17. He pledged to resign once a new leader was selected.

"The prime minister does not stand above the law but also is not below the law," he said, referring to media leaks of private testimony which have virtually convicted him in the public eye, though charges have yet to be laid.

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