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Kadima party chair Tzipi Livni wants new elections held as soon as possible, and to that end, has instructed her party's faction chairman, MK Yoel Hasson, to submit legislation today for the immediate dissolution of the Knesset and for new elections in 90 days - that is, on January 27, 2009.

In this way, the foreign minister hopes to seize the initiative and regain the momentum she lost during her failed efforts to form a government.

In another bid to bolster her position, MK Tzachi Hanegbi, who is close to both Livni and Prime Minister Ehud Olmert, plans to urge Olmert to declare himself temporarily incapacitated and to allow Livni to replace him for at least part of the time remaining until the election, to enable her to enter the race from the Prime Minister's Office.

Earlier yesterday, Livni officially informed President Shimon Peres of her decision to go to elections, declaring: "I refuse to pawn Israel's future for the prime minister's seat."

Her efforts to form a government without going to elections collapsed over the weekend after Shas, the Pensioners Party and United Torah Judaism all refused her final offer. Livni, who called these parties' demands "extortionate," told Peres that she had done everything she could to try to cobble together a parliamentary coalition, and noted that other parties said they also prefer elections.

"If everyone agrees that elections are in order," she told the president, "then we must do it quickly."

"I know that time will not contribute to advancing the coalition negotiations and that time cannot create a solution, but rather only prolong the uncertainty, and that is the basis for my decision," Livni told a press conference in Jerusalem following her announcement to the president.

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Knesset Speaker Dalia Itzik, meanwhile, independently decided yesterday to explore the possibility of dispersing the Knesset as early as this week.

Another issue she is expected to discuss in talks with Knesset faction leaders beginning today is an agreement to refrain from voting on budget issues until a new parliament is voted into office. Lawmakers are concerned that "campaign economics" - the introduction of populist laws aimed at winning electoral support - could sweep the Knesset if the parliament remains in session during the run-up to a general election.

"I will begin talks to see ... [that] they remember that there is the state, first of all, that there will not be anarchy and that [the dispersal of the Knesset] will be conducted in the most dignified possible fashion," said Itzik. "It must be done by agreement."

Any work carried out by the lame-duck Knesset in the next few weeks will be "a waste of electricity and water," said Labor Party faction whip Eitan Cabel, adding that he is willing to reach an agreement on an orderly dissolution of the parliament.

MK Menahem Ben-Sasson (Kadima), who heads the Knesset Constitution, Law and Justice Committee, called on Knesset faction leaders to pass a law this week on holding early elections, to bring about the parliament's immediate dispersal.

"There's no point in waiting three weeks before the election recess," said Ben-Sasson. "Campaign economics will thrive during this time and irresponsible Knesset members will pass unrestrained budgetary laws."

The Basic Law on the Government gives the Knesset 24 days to disperse, but legislators have the authority to shorten that period by passing a law calling for its immediate dissolution

The need to approve the 2009 state budget as soon as a new government is in place might also spur a quick election campaign. But since the country generally sets elections 90 days in advance, it will be impossible to hold the vote much before February.