In November, 2005, Shimon Peres lost his Labor party leadership post to Amir Peretz, a trade union leader. Peretz pulled Labor from the government, prompting new elections, and Sharon withdrew from Likud to form the centrist Kadima (Forward) party, in an attempt to force a realignment of Israeli politics and retain the prime ministership. In January, 2006, however, Sharon suffered an incapacitating stroke and was hospitalised. Ehud Olmert, the deputy prime minister, became acting prime minister and leader of the new party.
The Kadima party won a plurality in the March, 2006, elections, with Labor placing second. In April, Sharon was declared permanently incapacitated; Olmert became prime minister, and in May formed a new coalition government. Escalating rocket attacks from Gaza and the capture by Hamas guerrillas of an Israeli soldier led to an Israeli invasion of the Gaza Strip in June, 2006, as well as other actions against Hamas and the Palestinians. Israel continue to mount attacks into Gaza in the succeeding months.
In July, Lebanese Hezbollah forces captured two Israeli soldiers, and Israel launched air attacks against targets throughout Lebanon and sent troops as far as 18.5 miles (30 km) into southern Lebanon; Hezbollah responded mainly with rocket attacks against northern Israel, including Haifa and Tiberias, but also offered resistance on the ground against Israeli forces. A UN-mediated cease-fire took effect in mid-August, and by early October Israel had essentially withdrawn from Lebanon. The invasion's aim of disarming Hezbollah and winning the release of the captured Israeli soldiers was in the main unattained, and Hezbollah's sustained resistance to Israeli forces enhanced the group's prestige in the Arab world. Amnesty International accused both sides of war crimes in the fighting, mainly because of their attacks on civilians.
As a result of the fighting in Gaza and Lebanon and the rise of Hamas in the Palestinian Authority, Olmert suspended his planned unilateral withdrawal from parts of the West Bank, and brought (October, 2006) a far-right party into his government to strengthen the coalition in the Knesset. Also in October, Israeli police accused Israeli President Moshe Katsav of sexual assault and other crimes, prompting an investigation and leading to calls for Katsav to resign (which he refused to do). The Israeli group Peace Now asserted in November that, according to government documents, nearly 40% (and perhaps more) of the land on which Israel's West Bank settlements were built was privately owned Palestinian land, in violation of Israeli law. More current information given by the government to the group in March, 2007, indicated that private land made up more than 30% of the settlements but did not indicate how much was Palestinian-owned (the vast bulk of the private land in the first set of documents was Palestinian).
In January, 2007, the head of the Israeli armed forces resigned, taking responsibility for the unsuccessful anti-Hezbollah campaign of 2006; his resignation led the opposition to call for the prime minister and defense minister to resign as well. (An independent report, released in April, 2007, was critical of the prime minister's and defense minister's handling of the invasion.) Late in January, 2007, Katsav secured a suspension of his duties as president after Israel's attorney general said he was considering charging Katsav with rape and other crimes; a plea deal in June allowed him to plead guilty to lesser charges and avoid prison but forced him to resign. Shimon Peres was elected president earlier the same month.
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