Prime Minister Ehud Olmert and Defense Minister Amir Peretz agreed yesterday to appoint Major General (Res.) Gabi Ashkenazi as the 19th Chief of Staff of the Israel Defense Forces. Ashkenazi, who is currently serving as Director General of the Defense Ministry, will take over from Dan Halutz, who announced his resignation last week. Olmert and Peretz also asked deputy Chief of Staff Moshe Kaplinsky, who was short-listed to take over Halutz's vacated position, to stay in his post and contribute to the rehabilitation of the army in the aftermath of the war in Lebanon.

Olmert and Peretz met yesterday in the Knesset, and contrary to some of the prognoses, the prime minister opted not to broaden the already troubling rift between him and the defense minister, and accept his proposal to appoint Askhenazi.

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The recommendation to appoint Ashkenazi will be brought today before the committee advising the government on senior civil service appointments, headed by retired judge Yaakov Tirkel, for approval. No problems are expected.

On Sunday, during the cabinet meeting - or a week later - the cabinet will be asked to authorize the Ashkenazi choice.

Peretz met with Ashkenazi at the Knesset last night and informed him officially of the decision to recommend him to replace Halutz.

Supreme Court Justice Ayala Procaccia issued a show-cause order yesterday that demands that Olmert and Peretz justify, within four days, the reasons they will not delay the appointment of a new Chief of Staff, until the publication of the interim report of the Winograd Committee, which the government set up in order to examine the way the second Lebanon war was conducted. The report is expected to be completed in early March.

On February 1, the Supreme Court is expected to issue a decision on a petition calling on the prime and defense ministers to delay the appointment of a chief of staff until the interim Winograd committee report is published.

The Olmert-Peretz meeting yesterday lasted half an hour. The defense minister officially recommended Ashkenazi's appointment, and the prime minister said that he, too, supported him for the post.

The two also justified their support for Ashkenazi.

Olmert told Peretz that "I held 15 different consultations on the appointment and in most of them I heard support for the appointment of Ashkenazi. I was given a complete picture on the reasons for which he is the right candidate who is capable to lead and continue the process of learning the lessons of the war, which Halutz initiated."

The prime minister thanked Peretz for the "professional and non-political way" the process was handled and said that it "was of utmost importance to handled the matter in this way, for the sake of the IDF and the entire country."

"It was done the right way," Peretz said, and thanked Olmert for the consultations he made and the formal way in which the appointment was handled.

The main question that has remained unanswered is whether Major General Moshe Kaplinsky will decide to stay in the army. In their joint announcement, and during individual meetings with Kaplinsky, both Olmert and Peretz expressed their wish to see the deputy chief of staff stay.

Peretz also made a similar call to the third candidate to replace Halutz, commander of the ground forces, Major General Benny Gantz.

Kaplinsky has still not offered a final answer on the matter, but he did hold a meeting with Ashkenazi who told him that he would like him to stay in place as his deputy.

Kaplinsky was critical of the decision to appoint Ashkenazi at this time, and in a letter sent to the defense minister on Sunday - withdrawing his candidacy for the chief of staff post - expressed his views.

If Kaplinsky does decide to step down, it may be the current military attache to the Washington Embassy, Major General Dan Harel, who will be appointed in his place.

Peretz and Halutz appeared yesterday at a conference in which the lessons from the Lebanon war and the work plans of the IDF for 2007 were presented to the senior reserve officers - with ranks of Brigadier General and Colonel.

Those attending commented that Halutz spoke with the confidence that characterized him prior to the war.

He stated on a number of occasions that "I am responsible, but I am not guilty," for what happened in the war.

The outgoing chief of staff commended Kaplinsky and called on him to stay in active service.

Halutz also said that he intended to take action against three officers with the rank of Colonel, for leaks to the press during the war.