Olmert and Kadima win victory in Israeli poll

Israeli voters delivered Ariel Sharon's successor, Ehud Olmert, a decisive mandate to go ahead with his declared plan to withdraw up to 80,000 settlers from the West Bank and draw up new borders with the Palestinians.

While the vote for Mr Olmert's own party, Kadima, was significantly lower than its strategists had hoped, at 28 seats, it emerged as easily the biggest single party with the capacity to build a coalition which can carry through his plans.

The election victory nevertheless clears the way after what will undoubtedly be complex coalition negotiations over the coming days and even weeks for Mr Olmert to press ahead with the West Bank withdrawal plan on which he fought the election.

With Labour under its new leader, Amir Peretz, securing 20 seats, yesterday's vote ­ admittedly in what appears to be the lowest turnout in Israel's history at around 63 per cent ­ creates a potential centre-left block with enough seats to command a clear majority in the 120-seat Knesset.

As predicted, Avigdor Leiberman's hard right Yisrael Beiteinu Party was one of the successes of the election with 12 seats.

Meanwhile, a top aide to Mahmoud Abbas said that the Palestinian Authority President was ready to renew negotiations with Israel immediately. " We're ready to go into direct and immediate negotiations to implement the road map if the Israeli government is ready," said Nabil Abu Rdeneh. "We hope to see an Israeli government ready to implement the road map."

What was scarcely predicted at all was an astonishing seven seats predicted for the brand new Pensioners Party headed by the former senior Israeli intelligence agent Rafi Eitan. The party had already indicated keenness to be in a coalition government.

The exit poll results were a humiliation for Likud, with 11 seats. Former prime minister Benjamin Netanyahu, who took over as the party's leader when Mr Sharon staged his sensational breakaway from the right wing party last November, had said he wanted at least 14 seats and there will be doubts over whether he can remain as leader.

Mr Netanyahu insisted last night he intended to remain as the party's leader while acknowledging that the party had been dealt a "heavy blow". In a direct rebuke to Mr Sharon, who is in a coma in a Jerusalem hospital, Mr Netanyahu said the party had already been damaged when "the former head of the party left it, and left us a broken, shattered movement". But he declared: "We intend to continue along the path we have only just begun in order to ensure this movement is rehabilitated and takes its rightful place in the nation's leadership."

Mr Olmert had effectively made the election a referendum on his plan to begin disengagements from the West Bank which if enacted would mean withdrawing almost eight times as many settlers as were taken out of Gaza by Mr Sharon last August. In his most specific pledge of the election campaign to withdraw settlers from east of the huge 450-mile separation barrier, Mr Olmert had written in an eve of poll article for the mass circulation daily Yedhiot Ahronot: "We will determine the line of the security fence, and we will make sure that no Jewish settlements will be left on the other side of the fence. Drawing the final borders is our obligation as leaders and as a society."

Late last night in his victory speech to party workers, Mr Olmert directed an appeal to the Palestinian leadership through Mahmoud Abbas, the Palestinian President. Saying that Israel had abandoned its dream of a greater Israel he appealed to the Palestinians to reciprocate. "We have to use all our strength to return hope to the younger generation and our Palestinian neighbours," he said.

But he warned that that if the now Hamas-led Palestinian leadership refused to recognise Israel and abandon its dream of the whole of Palestine "we will take our fate into our hands. The time has come to act."

While the parties were revealing little of their stances for coalition negotiations last night, some analysts were suggesting that a possible combination was centred round Kadima, the ultra-orthodox party Shas, and Labour. Although Shas, which took 13 Knesset seats, was opposed to Gaza disengagement last August, its opposition to withdrawing settlers is not absolute and it is known to be anxious to return to government in return for higher social welfare payments and funding for religious colleges.

Uri Dromi, a leading Israeli analyst who worked for the assassinated prime minister Yitzhak Rabin, said that while he "hated to say it" Shas might provide "Jewish cover" for the disengagement to go ahead.

At the Talpiot polling station yesterday, Yossi Hen, 37, from a Moroccan family, who left his 4,000-shekel-a-month (£500) job as a social worker to work in a garage because he could not support his wife and two young children, said he was voting for Amir Peretz, the Labour leader. He said: "I don't believe this election will change a lot, socially economically or politically. And I don't think the $1,000-a-month [£575] minimum wage [sought by Mr Peretz] will happen. But I like his social policy and I think he cares about the poor people."

Tilahun Malkia, 27, an Ethiopian film student, said he had voted Likud in 2003 because: "Ariel Sharon promised that he would bring the Falashmura [converted Ethiopian Jews] to Israel. But he didn't keep his promise."

He said he was now voting for a new Ethiopian party, One Future. He added: "I hope they get a Knesset member because we need one to deal with our problems, absorption and the lack of education and jobs. They are also fighting racism."

Simon Gabai, 29, typical of the younger voters who helped the Pensioners Party to its shock success, said that his father had not received his pension payments for the past two years. He worked for 35 years and it is time to get him what he deserves," he said.