The new chairman of Kadima, Tzipi Livni, gave her long-awaited victory speech early Thursday morning following a dramatic night which saw her projected lead shrink to a mere percentage point in her primary face-off with Shaul Mofaz.

"All the people who came to vote today expressed what they wish to happen in this country," Livni told reporters. "The national responsibility [bestowed] by the public brings me to approach this job with great reverence."

In reference to her primary opponents - Ministers Avi Dichter, Shaul Mofaz, and Meir Sheetrit - the foreign minister said "they were rivals of the moment, but together we have one mission. Together we will create government stability."

"The responsibility is not solely mine, but also on members of Kadima," Livni, who spoke with Prime Minister Ehud Olmert earlier Wednesday evening, said. The new Kadima chairman said she intended to "meet with the members of the Knesset factions in order to form a coalition."

Livni thanked the voters, adding: "I am going forward with your strength that will be with me from here on out."

Despite the landslide victory attributed to Livni in the exit polls by Israel's three major TV stations, Livni beat Mofaz in Wednesday's Kadima primary by a margin of 431 votes, a difference of 1.1 percent. Livni garnered 43.1 percent to Mofaz's 42 percent. Voter turnout in the primary stood at 55 percent.

Livni said she would launch coalition talks on Friday, even though President Shimon Peres cannot officially ask her to try to put together a government until Olmert resigns the premiership.

After she is assigned the task, she will have 42 days to form a new ruling coalition, and if she succeeds, she will become Israel's first female prime minister since Golda Meir stepped down in 1974. If she fails, the country will hold elections in early 2009, a year and a half ahead of schedule.

Mofaz telephoned Livni on Thursday morning, congratulating her on her primary victory, Israel Radio reported.

An attorney for Mofaz is recommending that the candidate appeal the results of Wednesday's party primary, arguing that voting irregularities primarily in the Arab sector could very well make up the difference separating Mofaz and Livni.

The lawyer, Yehuda Weinstein, acknowledged Livni edged out Mofaz by 431 votes, yet he pointed out that the voting station in the Negev town of Rahat offered a pool of 430 votes. "It is impossible to attain power in Israel by a margin of one vote," Weinstein said.

The Rahat votes were nullified after one of the town's residents caused a commotion at the voting station, flinging envelopes in every direction while people were placing slips into the ballot boxes. Because of the tightness of the race, the Mofaz camp is likely to request that the Rahat votes be counted.

"Everyone is armed with complaints in such a tight race, and every complaint will be addressed," said Dan Arbel, the chairman of the election committee. "There are accusations of wrongdoing in the Ashkelon voting station, in Beit Jean, and we will investigate these claims. To this point, we have not found a reason to disqualify any voting station except for Rahat." Arbel noted that all of the results were reported to the elections committee.

Arbel rejected Mofaz's claim that the television exit polls which were released before the final votes were tallied influenced the voters. The party extended the voting an extra 30 minutes past the original 10:00 P.M. closing time. "The alternative would be that [people] would not be able to vote," Arbel said.

Citing evidence it says is proof of illegal activity, the Mofaz campaign is considering a request to disqualify certain voting stations in Arab towns. Earlier, the Mofaz campaign said it would urge a partial vote recount, citing election fraud which is allegedly backed by evidence. Once the final tally results showed a near photo finish, campaign officials huddled with lawyers at Mofaz headquarters for emergency consultations.

"The results are amazingly close to each other," Mofaz associates said.

Mofaz aides also claim that the television exit polls that declared a double-digit victory for Livni some 15 minutes before the polls' closing had a bearing on voters as well as potential voters, thus tilting the final results in Livni's favor.

Prime Minister Ehud Olmert on Wednesday evening phoned Livni and congratulated her on her victory in the party primary after TV exit polls indicated she had won by a landslide.

Olmert wished Livni good luck and told her she would receive his full cooperation in passing on the role of leadership in the event she is capable of establishing a coalition. The two planned to meet later this week.

Having secured more than 40 percent of the vote, Livni will replace Prime Minister Ehud Olmert as Kadima chairman, negating the need for a second round of voting.

Livni's main rival for the leadership of the ruling party, Shaul Mofaz, the hardline transportation minister and former army chief, was predicted to have won 37 percent of the vote.

The exit polls awarded the two other candidates, Meir Sheetrit and Avi Dichter, 7 percent each.

MK Ronit Tirosh, who has announced her support for Mofaz, asked the chairman of Kadima's election panel, former judge Dan Arbel, to refrain from pronouncing Livni as victor before the indications of fraud have been disproved.

Arbel told Israel Radio that "when the race is so tight, each side has all sorts of claims. We will look into them closely, but so far we haven't found any of them to be based in truth."

Livni will replace Olmert, who is stepping down in light of multiple corruption allegations.

Late Wednesday she thanked her supporters in a phone call to her headquarters.

"You fought like lions...you did an amazing thing, and I just want to do all the things you fought for," she said. "I know you did it as friends, but like me you did it because you want this to be a better place."

The biggest issue at stake was the future of Israel's peace talks with the Palestinians, with Livni seen as far more amenable to a final deal than Mofaz. Livni, 50, is currently Israel's lead negotiator in those talks.

Mofaz was seen as having a better chance at cobbling together a ruling coalition if he had won Wednesday's primary. But pre-vote polls showed Livni to be a far stronger candidate in a general election against Israel's other political star, former prime minister Benjamin Netanyahu of the rightist Likud Party.

Kadima extended the voting hours by 30 minutes Wednesday night, apparently to give voters returning from work more time to cast their ballots at crowded polling stations. Analysts predicted a high turnout would favor Livni, who has a wide advantage in opinion polls but who is seen not to have rallied party activists as efficiently as Mofaz.

The fact that only 74,000 party members, in a country of 7 million people, were eligible to vote added to the uncertainty of the outcome. Israeli media reported that an hour before the new closing time of 10:30 P.M. some 45 percent of the eligible Kadima voters had cast their ballots. However, voting often picks up in the evening after working hours in Israeli elections.

Hamas: Both Livni and Mofaz deny Palestinians' rights Meanwhile on Thursday, Ismail Haniya, the de-facto prime minister of Hamas in Gaza, expressed indifference at the predicted election victory for Tzipi Livni as the new leader of Israel's ruling party, saying both she and her rivals deny "legitimate Palestinian rights."

"All Israeli leaders unite in their hostile positions against our people and in denying their rights, notably Jerusalem and the refugees," Haniya told reporters in Gaza.

"Regardless of who will win in Israel, we won't change our position," he said, adding "the Zionist dream to establish the great Israel has been defeated by the Islamic project, which gained in strength dramatically in the region."