( L - R ) Peretz, Olmert, Livni, Cabel

JERUSALEM (Reuters):

A member of Israeli Prime Minister Ehud Olmert's cabinet quit yesterday and pressure mounted within his ruling party for him to resign after a scathing report on his handling of last year's war in Lebanon.

Eitan Cabel, a minister without portfolio from the Israeli leader's main governing partner, the Labour Party, told a news conference: "I can no longer sit in a government headed by Ehud Olmert."

Cabel said Olmert "must resign" after a commission probing the inconclusive war against Hezbollah fighters listed on Monday severe failings on the part of the premier, Defence Minister Amir Peretz of Labour and the army chief, who has already quit.

In potentially the most serious blow to Olmert, Foreign Minister Tzipi Livni told aides "he must go," Israel's Channel 10 television network reported. Livni is widely seen as the leading candidate to succeed Olmert.

Olmert, who has vowed to stay on, lobbied to save his job after media reports said a majority of lawmakers inside his centrist Kadima now favoured his ouster.

A statement by Olmert's office said he had the support of a lawmaker quoted earlier as urging him to resign.

Gathering signatures

Party sources said the head of the Kadima faction in Parliament, Avigdor Yitzhaki, was gathering signatures for a letter he would present to Olmert tomorrow, asking him to resign.

Besides Livni, another possible candidate to succeed Olmert is Deputy Prime Minister Shimon Peres. Former prime minister Binyamin Netanyahu of the rightist Likud party could also pose a challenge.

Under Kadima's bylaws, Olmert can only be ousted by agreement. Parliament could force him out by a no-confidence vote for which there does not yet appear to be a majority.

Parliament will meet in special session tomorrow on the war findings, answering motions from lawmakers who have been vocal in their demands for Olmert to step down.

Newspaper headlines spoke of a "noose tightening around his neck" and a "gun to his head".