Tzipi Livni said to be poised for return

Tzipi Livni, Israel's former opposition leader who crashed out of politics this year after losing her party's leadership contest, is poised to make a political comeback as head of a new party ahead of early elections in January.

Ms Livni, right, who enjoys broad support in the West and was once regarded as Israel's prime minister-in-waiting, will reportedly make a decision "within days" on whether to contest the next elections, but sources say she is preparing to run.

The politician's fall from grace in March deprived Israeli politics of its last heavyweight figure with serious pro-peace credentials and the Palestinian issue is expected to take centre stage in a Livni campaign.

Sources said she believed the failure of Prime Minister Benjamin Netanyahu's right-wing government to reach a peace deal with the moderate Palestinian leader, Mahmoud Abbas, was a "huge missed opportunity". Mr Netanyahu, whose pro-settler coalition has talked up the Iranian nuclear threat to the detriment of the peace process, is expected to win easily in January's elections, but he will have to court other parties to form a ruling coalition. The two other centrist parties likely to get a strong showing are a new party headed by former talkshow host Yair Lapid and the once influential Labour party, headed by Shelly Yacimovich. The former has voiced a hardline position on the Palestinian issue, while Ms Yacimovich has sidestepped the debate.

Recent polls suggest that Ms Livni, who failed to shine in opposition, would win as many as 16 seats in the 120-seat Knesset, substantially less than the 28 seats she won in 2009.

Although her party emerged victorious then, Mr Netanyahu took the helm after succeeding in forming a coalition with right-parties.