Gen Halutz’s surprise resignation came after several internal Israeli military inquiries into the conduct of the war but before the major investigation into the conflict, known as the Winograd Commission, delivers its interim findings, which are due in February or March.

There has been considerable debate in Israel about the summer conflict, and particularly the failure of the announced government policy to crush Hizbullah and to secure the release of two Israeli soldiers whose capture on July 12 triggered the war. There has been a long debate about the decision to use ground troops, who only moved in to southern Lebanon in large numbers towards the end of the conflict. The war claimed the lives of more than 1,000 Lebanese, including an unknown number of Hizbullah fighters, and 159 Israelis, of whom 39 were civilians.

Halutz's resignation came just days after he rejected the idea of a war with Syria in the summer of 2007.

Halutz's decision to step aside ratcheted up the pressure on Prime Minister Ehud Olmert (pictured right) and Defense Minister Amir Peretz, whose roles during Israel's largest military operation since 1982 also have been assailed.

Halutz stepped down at the end of an already turbulent day for Olmert: Hours earlier, the Justice Ministry ordered police to launch a criminal investigation into his conduct in the sale of Israel's second-largest bank before he became prime minister last year.

At least two other political cases involving Mr Olmert are being studied and may yet lead to more criminal investigations. Israeli prime ministers have been investigated while in office in the past without being charged with any crime, but many say that while Mr Olmert might survive the fallout of the Lebanon war, he may be brought down by political scandal.

In his resignation letter Gen Halutz spoke of taking “responsibility” but he pointedly admitted no failures or mistakes in the conduct of the war in Lebanon. In the letter, addressed to the prime minister, Ehud Olmert, he said: “In order to lead, we must carry out our responsibility. Therefore, after completing my mission for now, I wish to inform you that I plan to end my role as chief of staff immediately.”

Three candidates dominating the succession speculation are deputy chief of staff Maj. Gen. Moshe Kaplinsky, who was dispatched to the Lebanon front to assume command during the war; Gabi Ashkenazi, a retired general and current director general of the Defence Ministry; and Maj. Gen. Benny Ganz, Israel's top field officer.

Olmert's bureau said the prime minister initially asked Halutz to reconsider, but accepted his resignation after realising the military commander was determined to step aside.

Sources: The Guardian, AP, The Independent