Israeli TV channel 2 reported on Thursday that the Israeli Prime
Minister, Ehud Olmert, has decided to ask his Defense Minister, Amir
Peretz, to step down. Olmert’s office denied the report. 

Channel 2 reported that sources at Olmert’s office said that Olmert will ask Peretz to resign and take another position in the cabinet, and that if Peretz refuses, Olmert will fire him.
But sources at Olmert’s office said that this report is “nonsense”, Israeli online daily, Haaretz, reported.

Haaretz added that officials at the Defense Ministry were unavailable for immediate comment.
Meanwhile, an official statement from Olmert’s office said that “contrary to the reports, Olmert has not decided to fire Perez or to alter his position”.

Peretz, leader of the Labor party in Israel, became the Defense Minister and formed his government in May 2006.
Peretz does not have a sufficient military background and ran his campaign on social issues, Haaretz added.

Both Peretz and Olmert have been subjected to sharp criticisms over the failure of last summer’s war with the Lebanon-based Hezbollah party last summer.

Israeli sources reported that Olmert’s government could face critical scrutiny and a sharp political crisis since Olmert’s Kadima party has Peretz’s Labor party as its main coalition partner.
Yet, Peretz is also facing voices from within his own party calling on him to step down from the Defense Ministry and to take a social portfolio instead.