Tel Aviv - In a contest which could decide the fate of the Israeli-Palestinian peace talks, Israel's ruling Kadima party began electing a new leader Wednesday to replace discredited Prime Minister Ehud Olmert.

Some 144 polling stations opened their doors at 10 am (0700 GMT) at locations throughout the country, and stay open for 12 hours, to enable the 74,000 eligible Kadima members to cast their ballots. By mid-afternoon, slightly more than 13 per cent had done so.

"I call on everyone to come and vote," frontrunner Tzipi Livni told reporters as she cast her ballot in Tel Aviv.

Livni, 50, Israel's foreign minister and chief negotiator in talks with the Palestinians, has had a consistent, two-digit lead in opinion polls over her main rival, Transport Minister Shaul Mofaz.

But Mofaz, 60, has expressed confidence he will take the contest because he has greater influence with field activists who plan to bring in undecided voters.

A high voter turnout is therefore in the interest of Livni, who has promised to fight corruption in Israel's ruling system. "Come and vote. The change begins here at the ballot box," she said.

Mofaz, a former defence minister and army chief of staff who has highlighted security as a top priority during his campaign, cast his vote in Kfar Saba, north-east of Tel Aviv and near his hometown of Kohav Yair.

"I am certain I will win. Wait for the results at midnight," he told reporters at the polling station.

Both Livni and Mofaz hope to win enough votes - at least 40 per cent of the ballot - to avoid a second round next week.

The other two candidates, Public Security Minister Avi Dichter and Interior Minister Meir Sheetrit, are expected to garner around 6 per cent of the vote each, according to opinion polls. They will be unable to ensure a second round of polling if together they receive less than 20 per cent of the vote.

Dichter, 56, a former head of the Shin Bet internal security organization, cast his ballot in the southern coastal city of Ashkelon after taking his daily early morning swim in the Mediterranean, while Sheetrit, an experienced legislator, voted in Yavne, his hometown south of Tel Aviv.

The primary is considered one of the most crucial in Israel's history. Some 74,000 registered members of the ruling party - almost exactly 1 per cent of Israel's population - will be determining who might well become Israel's next prime minister.

The victorious candidate will replace Olmert, who announced in July that he was quitting the party leadership, and then the premiership, because of ongoing investigations against him for alleged corruption.

The party leadership contest could also be decisive for the peace process with the Palestinians, with Livni, a centrist and staunch advocate of a two-state solution to the Middle East conflict, likely to continue negotiations according to their current format.

Mofaz, by contrast, is a comparative hawk in the centrist party, who has openly and repeatedly said he opposes dividing Jerusalem and wants to postpone negotiations on a final peace deal.

Palestinians have not commented on the different views of the two leading candidates, and President Mahmoud Abbas, who met Olmert in Jerusalem Tuesday night, said that "we work with the government of Israel and not with an individual or a party."

According to senior Palestinian official Saeb Erekat, he said he wanted to continue the peace talks "until the last hour."

Olmert and Abbas pledged last November to try and reach a deal by the end of this year.

Initial results of the Kadima contest are expected by midnight and the official tally sometime early Thursday morning.

Israel's main television channels, however, will broadcast the results of exit polls shortly after voting ends at 10 pm (1900 GMT).

The new Kadima leader will try to form a new coalition government, but if he or she fails, early elections by March 2009, a year ahead of schedule, are likely.

Olmert could continue to lead at the head of a transitional government until then.

If the Kadima primary is decided in Wednesday's first round, Olmert will notify his cabinet of his intention to resign at its next session Sunday, a formal procedure required by law, his aides said Tuesday.

But they said the premier is expected to formally hand in his resignation to President Shimon Peres only in early October, because Peres is traveling to the UN General Assembly meeting late this month.

His resignation, which will take effect 48 hours later, by law automatically means the resignation of his cabinet, which then becomes a caretaker government. (dpa)