Public support for Olmert, 61, has disintegrated. The prime minister is clinging to power after a week in which his conduct of the war last summer was condemned by the government-appointed Winograd commission and his cabinet was riven by dissent. Yesterday Amir Peretz, the defence minister, announced his intention to step down at the end of this month.

According to weekend opinion polls, Olmert’s approval rating is barely above zero. More than 60% of Israelis want him to resign. The American-educated Netanyahu, 57, enjoys three times the popularity of any potential rival for the post.

In a powerful speech to Israel’s parliament last week, Netanyahu, who was prime minister from 1996 until he lost a general election in 1999, declared: “The state of Israel needs better leadership.” If he returns to office he will be expected to adopt an aggressive approach to his Middle Eastern neighbours and to display his confidence in Israel’s use of military force and political muscle.

“Peace can never be achieved by unilateral steps,” he said, referring to Olmert’s willingness to withdraw from much of the West Bank.

“The time for a reassessment of our policy has come. We should look at the situation without any illusion and restore to the state of Israel its might, deterrent power and above all our self-respect,” he argued, while Olmert sat watching, stony-faced.

Netanyahu is the principal beneficiary of a shift to the right in Israeli politics and society. Increasingly, middle-class voters have placed a strong emphasis on security and rejected the collectivist views that inspired an older generation of Jewish settlers.

“We’re fed up with the Arabs and the chances of reaching peace with them,” said one Tel Aviv lawyer. “We gave them too many chances. They don’t want us here, period. That’s why I think Netanyahu and his political approach is the right one.”

Indeed many Israelis now believe that a security wall to separate them from the Palestinians is the best solution, rather than peace negotiations which they believe will lead nowhere.

For them, Netanyahu is the tough-talking alternative to the hesitant Olmert, who they blame for failing to win the war with Hezbollah.

Netanyahu served for four years as an officer in Israel’s equivalent of the SAS, while Olmert did his national service as a war correspondent. This gives the hawkish Netanyahu an advantage over Olmert, who is seen as weak and vacillating on military matters.

Netanyahu’s opponents warn against a return to high office. “He can’t work under pressure and is too panicky by nature to be a good prime minister,” said a rival.

Haim Israeli, a long-serving but now retired civil servant in the Ministry of Defence, said: “He’s a dangerous man.”

Last week Olmert outmanoeuvred Tzipi Livni, his foreign minister, who called on him to resign, persuading all but two of his Kadima MPs to support him. But it seemed a Pyrrhic victory. A huge demonstration attended by people from across the political spectrum suggested that his days in power are numbered.

If Olmert goes by the summer, when the full findings of the Winograd inquiry will be published, his successor will face two immediate challenges: the Iranian nuclear threat and the Palestinian issue.

A close friend of Netanyahu said: “He won’t wait too long to attack Iran.” As for the Palestinians, it seems unlikely that he would make territorial compromises with them.

“A shaky hand is holding David’s sword these days,” Netanyahu told Olmert last week. “The restoration of our might is a matter of life or death.”