Israeli Prime Minister Ehud Olmert battled to keep his job on Wednesday as his foreign minister became the most senior figure yet to demand he quit over a damning report on his handling of the Lebanon war.

"I expressed my opinion that his resignation is the right thing to do," Tzipi Livni, previously a key ally in Olmert's Kadima party and also a deputy premier, told a press conference after meeting Olmert.

Israeli Prime Minister Ehud Olmert pauses after speaking at a special meeting of the cabinet at his office in Jerusalem. Olmert battled to keep his job on Wednesday as his foreign minister became the most senior figure yet to demand he quit over a damning report on his handling of the Lebanon war.[AFP]

The move piled the pressure on the weakened premier. Without the support of Livni, the most popular minister in the cabinet, Olmert stands little chance of controlling his coalition government, pundits say.

In a further blow, another ex-ally, the head of Kadima's parliamentary bloc, quit in protest at the premier's refusal to step down after a government inquiry blasted his leadership during last summer's 34-day war.

Avigdor Itzhaki told Olmert he was resigning during a meeting of Kadima's 29 lawmakers, a senior government official told AFP. He had earlier told AFP it would be "suicidal" for Kadima if Olmert remained in his post.

Olmert, 61, remained defiant in the face of the mutiny.

"I am personally not in the most comfortable position," the senior government official quoted him as telling the Kadima meeting.

"But I am past the age of 60 and I've seen a lot of things in my life and I've learned not to run away from responsibility," said Olmert, who officially assumed his post less than a year ago.

Olmert's spokeswoman quoted him as saying he "needs to stay and fix the problems."

Kadima cannot forcibly oust Olmert, as its charter does not spell out such a procedure.

Following the party meeting, Deputy Prime Minister Shimon Peres said Olmert had received "unprecedented support" from the MP. "It was a great day for Kadima, which came out (of the meeting) unified and convinced of its strength."

For its part, public radio reported that only Itzhaki, Livni and MP Marina Soldkin had demanded that the prime minister resign.

If Olmert were to quit, the party would name a new premier who would then either preside over the current 78-member coalition in the 120-seat parliament, or try to form a new coalition if some of the partners bolt.

Livni, who was largely spared from criticism by the Lebanon war inquiry, said she intended to remain in government and, throwing down a second gauntlet to Olmert, said she would contest the leadership of Kadima should he resign.

But a senior Olmert aide warned that her comments were likely get her fired.

"She has expressed her lack of confidence (in the premier) and she has to go," said Tal Zilberstein, a senior political advisor to Olmert.

The premier's spokeswoman declined to comment on whether he intended to fire his rebellious foreign minister.

Meanwhile, Israeli media cited aides to Defence Minister Amir Peretz -- the Labour party leader roasted by the report for failing in his functions during the war -- saying he would resign soon.

Peretz's office declined to comment on the reports. An ally, Labour MP Yoram Marciano, said Peretz was weighing the pros and cons, but had not taken a definitive decision.

Polls published on Wednesday showed that between 65 and 68 percent of Israelis want Olmert to resign, and that only six percent think he is capable of carrying out the functions of his office.

That pressure on Olmert will increase further on Thursday, when parliament holds an extraordinary session to discuss the report and a mass rally is due to take place in Tel Aviv to call on Olmert to resign.

Lawmakers could try to push for a no-confidence vote in Olmert's government, but support for such a move is uncertain. Its success could eventually lead to new elections, and surveys show that most of the parties in the coalition would lose seats in new polls.

Monday's partial report accused Olmert of "serious failure in exercising judgement, responsibility and prudence," of acting "hastily" and personally contributing to "over-ambitious" and unfeasible war aims during the war.

Israel launched the war on Hezbollah after the Shiite militia seized two soldiers in a deadly cross-border raid on July 12. The war killed more than 1,200 Lebanese, mostly civilians, and more than 160 Israelis, mostly soldiers, according to government figures.

It is widely regarded as a failure in Israel because it did not achieve its two main objectives -- freeing the two captured servicemen and stopping Hezbollah rocket fire.