Billionaire Russian-born Israeli businessman Arkady Gaydamak said Monday that he will run for mayor of Jerusalem, in a bid to replace incumbent Uri Lupolanski.

Gaydamak, rumored for months to be considering the move, said he made the decision after he was told Sunday that the Jerusalem municipality had decided against approving a march and demonstration by veterans of World War II.

"For a long time, I've talked about this possibility, and especially now, from yesterday, when I heard that the municipality of the city of Jerusalem will not allow veterans of the Second World War to march."

According to Gaydamak, the step showed that Lupolianski's "spirit was wrong" for the city.

There was no immediate response by Jerusalem city officials.

Gaydamak, speaking in English, told Israel Radio that "The veterans are the symbol of our Jewish state. These people fought the Nazis, and they gave their lives for the state of Israel, because by their victory against Germany, they created the conditions for the Jewish state so, we should pay enormous respoect to these people

"When the mayor of the city doesn't [understand] that, we should change him."

Several months ago, Gaydamak was reported to be consulting with friends in Moscow who could assist him in mounting a mayoral campaign. Associates of Gaydamak confirmed that he was considering the move, and that he had consulted with ultra-Orthodox circles in the capital.

The idea initially arose up when Gaydamak became involved in trying to mediate between the warring sides over the holding of the Gay Pride parade in Jerusalem.

Gaydamak was reported to have been convinced that he would have the support of both the ultra-Orthodox sector and the fans of the Beitar Jerusalem club (which he owns), seen as a key electoral base.

One of the steps he has taken so far in this direction is the strengthening of his ties with the ultra-Orthodox sector in particular.

In recent months, he has discussed the possibility of starting a political party, which he said would concentrate on social issues, leaving security and diplomatic issues to others. He also hinted at an alliance with Likud leader Benjamin Netanyahu.