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Opposition leader and Likud Chairman Benjamin Netanyahu on Thursday blasted the prime minister over his handling of the Second Lebanon War, saying that he had failed and must resign.

Speaking at the start of a special Knesset debate on the report into the 34-day war, Netanyahu said that Israel's leadership had failed the people during the war.

"Those who failed at war cannot be those who correct the failures," he said.

The opposition leader said that the war had proved that "the unilateral approach does not work."

He said that the war against Hezbollah was the first conflict in which Israel did not score a clear victory, while the Winograd report showed that "Israel's existence depends on its strength."

In his first public statement since the report was report was released, Netanyahu told Army Radio earlier in the day that, "It's clear to all that this government lost the last scrap of public trust, if it ever had any. It's clear to all that it should return to the people and let them speak their minds."

The Winograd Committee released a partial report Monday that leveled heavy criticism at Olmert, Defense Minister Amir Peretz and former army chief Dan Halutz for the conduct of the war.

Vice Premier Shimon Peres, representing the government in the debate, said that the government had not failed in conducting the war. "He who doesn't try, doesn't fail," he said.

"A leader, besides having a way, also needs a majority in the Knesset," Peres said, referring to Netanyahu.

"The government must first of all repair the failures, before doing anything else. After that, the aim is to continue on the path to peace with the Palestinians, and if possible, with the Syrians as well," he added.

At the session, MK Danny Yatom (Labor) also criticized the government and his own party's ministers. "Those that have lost the faith of the voting public can no longer represent it," he said. "My colleagues, Labor party ministers - you bear additional responsibility for remaining in your positions within the government," he added. Yatom proclaimed that the government had failed, and must now allow the people to make their choice.

Balad MK Ahmed Tibi criticized the government's decision to go to war initially. "We don't decry the failures of the war, we decry the decision to go to war," he said. "Olmert should have exhausted all other options before deciding to go to war."

Tibi also criticized the opposition saying "only 12 MKs can come with clean hands and say 'I told you so', and Netanyahu is not one of them."

Defending Olmert's decision to stay in office, Kadima MK Menachem Ben Sasson said that a true leader doesn't 'flip flop' according to public opinion, but stands strong. The calls on the prime minister to resign, he said, are dictated by the media.

"We are not a 'rally' democracy. We listen to criticism but in fact we rely on judgment, not the public's fickle moods," he said. We must listen "not only the 250,000 people that may show up for the rally [against the government] in Rabin Square tonight. We must listen to the residents of the north, the military personnel. They can sleep easy now."

Ben Sasson said that the prime minister proved his leadership ability precisely during a time of crisis. "Who will solve the problem? A leader that falls apart during a crisis, a man that doesn?t know how to proceed under pressure? Or a man that for an entire year has been fielding baseless accusations, insults, criticism, and is still running the country?" Ben Sasson asked. "The solution will be provided by a government that knows its shortcomings, that knows how to take responsibility for its failures," he concluded.

The opposition criticized Defense Minister Amir Peretz who did not attend the special debate.

Olmert's office said ahead of the debate that prime minister had no plan to speak, but he did attend. Aides to Minister Yaakov Edrey, the government liaison to the Knesset, said that Vice Premier Shimon Peres would instead represent the government.

Olmert's decision not to address the plenum sparked a furious response Tuesday from opposition lawmakers.

The chair of the Meretz faction, MK Zahava Gal-On, accused Olmert of cowardice, while Likud MK Limor Livnat blasted the move as "an acute cheapening of the highest institution of Israeli democracy."

After the debate, the Knesset will hold an additional urgent discussion on the harm done to the Jewish character of the state through the non-enforcement of the prohibition on the sale of leavened bread ("hametz") during Passover.

Gal-On called a discussion of the issue at this time a form of "hametz."

The original plan for Thursday was a short debate, during which representatives from just two factions would be able to speak, followed by a response from the government.

But a compromise was reached following extensive discussions between Knesset Speaker Dalia Itzik and the heads of the parliamentary factions.

Under the new arrangement, one representative from both Likud and United Torah Judaism, who requested the special session, were each to speak for 10 minutes, and the rest of the factions were each allowed five minutes.

Itzik, who is also acting president, opened the debate.