The prime minister spoke on TV and radio Wednesday evening. He also said, "I will vacate my position" to allow his successor to form a government.
His decision not to run in the Sept. 17 Kadima Party primary sets in motion a process to choose a new prime minister.
If Olmert's successor as party leader can form a coalition, Israel could have a new government in October. If not, an election campaign could take several months.
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