Daniel Levy, an analyst at the New America Foundation, said the administration did not yet appear willing to concede defeat, but argued that Israel was simply in no position to conclude a peace deal given the cloud over Olmert.

"It's not actually helpful to try to force a piece of paper through because the Israeli political system cannot absorb such a development," he said. "Politically speaking, fortunately or not, fairly or not, Olmert is a dead man walking." LINK