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In a statement, Netanyahu said he “respects Defence Minister Ehud Barak’s decision and thanks him for his cooperation in the government and highly appreciates his long-standing contribution to the security of the state”.
The Hamas movement ruling Gaza saw Barak’s decision to quit as proof that this month’s Israeli assault on the enclave was a disaster.
“This is evidence of the political and military failure that the government of Netanyahu and his defence minister suffered,” said Hamas spokesman Fawzi Barhoum.
Israel has called its offensive a success, saying it destroyed most of Hamas’s long-range rocket arsenal and killed the Islamist group’s top militants.
A former commander in an elite commando unit, Barak tried unsuccessfully to make peace with both the Palestinians and Syria during his time as prime minister.
He was at the forefront of Israel’s campaign for stronger international sanctions against Iran to halt what Israeli and Western leaders fear is a drive to produce nuclear weapons, allegations Tehran denies.
He has cautioned that Tehran was nearing a “zone of immunity” that would put deeply buried and fortified nuclear facilities out of reach of Israel’s military capabilities, stoking international concern it could opt to strike Iran.
But last month, Barak told Britain’s Daily Telegraph newspaper that an immediate crisis was avoided when Iran chose to use more than a third of its medium-enriched uranium for civilian purposes earlier this year.
He told the paper that the decision “allows contemplating delaying the moment of truth by eight to ten months”.
Listing his achievements, Barak said he had led the defence establishment and the Israel Defence Forces through a rehabilitation after the second Lebanon war in 2006 and the building of capability to deal with the threat from Iran.
Barak’s decision to call a news conference, with only two hours’ notice, had touched off speculation he might announce the formation of a new centrist bloc to challenge Netanyahu’s frontrunning Likud in the upcoming ballot.
Former Foreign Minister Tzipi Livni and ex-Prime Minister Ehud Olmert have been widely touted as possible candidates to lead such a bloc. Neither has announced their intentions, with only Livni widely expected to run.