Prime Minister Ehud Olmert, defending his decision not to resign in the wake of the damning report into the handling of the Second Lebanon War last year, told lawmakers Tuesday that the conflict had restored quiet to Israel's northern border.

"Two weeks ago, I visited the northern border, and at every place I was shown the positions once held by Hezbollah terrorists," he said. "Residents who were faced, hour after hour, minute after minute, with a Hezbollah man pointing his rifle at them - this situation no longer exists."

Olmert made the comments during special speech to the Knesset on the Winograd Committee's partial report on the war, marking the first time he has spoken addressed the plenum on the report since its publication 29 days ago.

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"I believed then as I believe now that the decision to go to war was the necessary one under the circumstances," he said. "It is true that the Lebanon war, like all wars until today, came with a high price. This is the part of the high price that the State of Israel has been paying for six decades for its desire to live in peace, security and independence."

The prime minister also addressed critics of his decision to list the release of captured Israel Defense Forces soldiers Ehud (Udi) Goldwasser and Eldad Regev, whose abduction July 12 sparked the war.

"The government I headed had goals when we went to war," he said. "The goals were ... the implementation of [Security Council] Resolution 1559 - removal of Hezbollah, the deployment of the Lebanese army, a complete cease-fire and the return of the captives."

"We knew the chance of returning the captives in a military operation were slim," he said. "But that did not stop us taking daring steps to that end."

"We could not have expected the UN in the Security Council decision, as well as the G-8 conference in Rome, to place the return of the captives at the top of their concerns had we not declared that they are at the top of our concerns," he continued.

"I am proud of the Government of Israel's decision on July 12 to respond in a harsh manner and with strength to the abduction of Udi and Eldad, the killing of eight of our soldiers, and the fire directed at northern communities," said the prime minister.

"I considered our plan of action for a long time before it occurred, I brought recommendations to the full cabinet, which after it heard all the details voted unanimously and even approved an announcement defining the goals of Israel's response," Olmert continued.

The prime minsiter lashed out at those lawmakers calling for his resignation, saying many of them supported the war at the time.

"I remember well the support given by this body to the government's decision July 12," he said. "Then, you stood up one after the other and soluted the government's actions, and its obligation to respond even given the knowledge that this strike would lead to strikes against the Israeli home front."

The prime minister personally singled out opposition leader Benjamin Netanyahu, who according to Olmert "offered his full and unconditional support. He too would do the same thing, he told me."

Olmert pointed out that the Winograd Committee found many instances of "effort and decision-making ability" on behalf of government leaders, and denied skirting responsibility for the war.

"The overall responsibility lies first and foremost with the government that I head. I admit with full responsibility to the failures ? but also to the great achievements," he said. "For all these reasons, the government I head will continue to lead the people of Israel to security, welfare, success, national reconciliation and with God's help also peace."

Netanyahu: War's greatest failure was loss of Israel's deterrence
Netanyahu, who addressed the plenum following the prime minister, said that while the opposition had indeed given government "full support to achieve the [war's] goals, but [it] failed to do so."

"In my opinion, the greatest failure is that as a result of the war Israel's deterrent capability has been severely harmed," he said.

"During the war we faced one front," he continued. "Now we face three fronts. In Lebanon, Hezbollah has increased the ordnance it had before the war. In the Gaza Strip, there has been a change since the war of turning it into a second Lebanon, including tunnels and bunkers. The Philadelphi Route ahs become a highway of arms smuggling."

"The loss of deterrence is not the army's problem," Netanyahu said. "But rather first and foremost the weakness of the policy. It started with a unilateral withdrawal from Lebanon and the creation of an armed Iranian enclave, the Winograd report addresses this, and then continued with the unilateral withdrawal from Gaza."

"You say you can fix it," said Netanyahu, referring to the coalition. "How can you fix it when you are the malfunction? Now you will use judgment? Now you have acquired the vast knowledge that you lacked? Now you will demonstrate the necessary care?"

"What have you done in the past year?" he continued. "What have you done to stop the massive flow of arms to Hezbollah and Gaza? What have you done to reinforce [buildings] in the Galilee? What have you done to provide Sderot with shelters? This was a wasted year. You did not learn any lessons because you are the lesson that must be learned."

"All that the Winograd Committee said can be summarized in one statement: The Government of Israel is shell shocked, and every day that passes with this government reduces Israel's deterrent capability and endangers its security. This government must go to the people. This government must go."

Olmert sought to avoid the Knesset debate, but it was forced on him when 40 MKs signed a document demanding he address the questions raised by his decision to remain in power despite the committee's harshly critical interim report.

In two earlier Knesset sessions on the report, Olmert was represented by Vice Premier Shimon Peres and Interior Minister Roni Bar-On.