Israeli premier-designate Tzipi Livni has decided to abort negotiations to form a new coalition government, opting for snap general elections one year ahead of schedule.

"We’ll go to elections as soon as possible," Livni, the leader of the ruling centrist Kadima party, told Haaretz on Sunday, October 26.

Livni will be meeting President Shimon Peres later on Sunday to inform him of her failure to form a government.

Peres, whose post remains highly ceremonial, can then set into motion a process leading to early election, expected in February, more than a year ahead of schedule.

Livni’s efforts to form a new government collapsed over failure to reach an agreement with the ultra-Orthodox Shas party.

"I’m not willing to be blackmailed, either diplomatically or in terms of the budget, and therefore, I will go to elections," said Livni, recently elected to replace Kadima leader after incumbent Ehud Olmert who resigned in a corruption scandal.

Shas has asked Livni for budgetary demands and the exclusion of occupied East Jerusalem from peace talks with the Palestinians.

"There are demands which are unreasonable, even in a situation in which attempts are being made to form a government," Livni told Yediot Aharonot.

"When I had to decide between continued extortion and bringing forward elections, I preferred elections."

While preparing for elections, Israel will continue to be led by embattled Olmert until a new government is formed.

Olmert will determine the budget and conduct the diplomatic negotiations.

Political commentators believe Livni and Kadima will contest the polls with political flaws.

"While Livni will start her campaign with public support, she will be doing so from a position of political weakness — her failure to form a government," commentator Aluf Benn wrote in Haaretz. "And she will have none of the benefits of incumbency."

Opinion polls predict that the right-wing Likud party under former premier Benjamin Netanyahu will be the largest party after the elections, with Kadima coming in second place.

"I’m not afraid of elections. I’m going to win these elections," Livni said.

The snap polls, the fifth in less than 10 years, are expected to affect peace talks with Palestinians.

"We hope the Israelis will choose to stay the course with the peace process," Palestinian peace negotiator Saeb Erekat told Reuters.

Olmert and Palestinian President Mahmoud Abbas have been meeting regularly since a US-brokered November conference formally re-launched the peace process after a seven-year hiatus.

But the talks made little progress over Israel’s refusal to discuss the fate of Al-Quds and the ongoing settlement activities.

(IslamOnline.net and news agencies)