Declaring victory in Israel's elections, acting Prime Minister Ehud Olmert's Kadima Party said Wednesday it would quickly form a ruling coalition to carry out its plan to pull out of much of the West Bank and draw Israel's borders by 2010.

Party officials said that despite a weaker-than-expected performance in Tuesday's election, Kadima has widespread support in parliament and would seek to finalize its withdrawal plans within a year.

Kadima won only 28 seats in the election, less than the 35 it had hoped for, but still making it the largest party in the 120-member parliament. Like every other ruling party in Israeli history, it will have to form a coalition government with other parties.

Haim Ramon, a senior Kadima lawmaker, told Israel Radio that the party is confident it will get broad backing for its withdrawal plan in parliament. "I believe we will have more than 70 legislators who will support the disengagement plan," Ramon told Israel Radio, referring to the expected West Bank pullout.

Ramon was quoted as saying he expects Olmert to have a government in place after the Jewish holiday of Passover, which begins in mid-April. Kadima officials said informal coalition talks have already begun.

Israel's ceremonial president, Moshe Katsav, said he will start talking to party leaders next week about forming a coalition. Traditionally, the Israeli president gives the nod to the leader of the largest party to try to form a government.

"I assume there will be a stable government," Katsav told Army Radio.

Olmert renewed his call for peace talks with the Palestinians and said he was prepared to make painful compromises, such as uprooting some Jewish settlements in the West Bank.

"In the coming period, we will move to set the final borders of the state of Israel, a Jewish state with a Jewish majority," Olmert said. "We will try to achieve this in an agreement with the Palestinians."

But he said Israel will act on its own if it cannot reach peace with the Palestinians. This scenario appears increasingly likely following Hamas' victory in recent Palestinian legislative elections. The militant group's new government, which rejects peace talks and has rejected international calls to renounce violence or recognize Israel, was set to be sworn into office late Wednesday.

President Bush called Olmert on Wednesday to congratulate him and invite him to visit Washington, at his convenience, after he forms his government, White House press secretary Scott McClellan said.

British Prime Minister Tony Blair also called Olmert to offer congratulations, while French Foreign Minister Philippe Douste-Blazy said the election result was "good news for peace."

Palestinian President Mahmoud Abbas said the Israeli election results would have little effect unless Olmert agrees to peace talks. "We want negotiations and not to dictate unilateral solutions," he said in Khartoum, Sudan, where he was attending an Arab Summit.

Hamas leaders rejected the unilateral approach.

Incoming Palestinian Prime Minister Ismail Haniyeh told Al-Jazeera television that he opposed Olmert's withdrawal plan. "Such a plan definitely won't be accepted by the Palestinian people or the Palestinian government," he said.

Kadima lawmaker Otniel Schneller, an architect of the withdrawal plan, told The Associated Press that during its first year in power, the government will try to finalize its moves while waiting to see whether Hamas moderates its views. "There is no precise timetable," he said.

With 99.7 percent of the votes counted, the center-left Labor captured 20 seats and the hawkish Likud, which dominated Israeli politics for decades, plummeted from 38 to 11 seats, making it only the fifth-largest party in the new parliament.

Final results were expected Friday, officials said. But for the first time, Israel will not be led by Labor or Likud. The results showed voters turning away from conventional parties to an assortment of third parties.

Among them were Shas, a party catering to Orthodox Jews of Middle Eastern ancestry that won 13 seats; Yisrael Beitenu, a Russian immigrants' party that wants to redraw Israel's map by transferring Arab towns to Palestinian control, with 12 seats; and the new Pensioners' Party, which won seven seats.

"The Big Bang," said the headline in Israel's two largest dailies, referring to the new political shake-up.

Olmert has said he would govern only with parties that accept his program. Likely partners include Labor, which ran on a social platform advocating a higher minimum wage and guaranteed pensions for the elderly; the Pensioners' Party, which also advocates more benefits for retirees; and the dovish Meretz party.

Kadima also will likely target an ultra-Orthodox party, and receive tacit support from Arab parties that won 10 seats.

Tuesday's vote was billed as a referendum on Olmert's withdrawal plan, and analysts said Kadima's lackluster performance could hinder -- but not prevent -- his ability to push forward.

"It will take a while to set up a coalition," said Asher Arian, a senior fellow at the Israel Democracy Institute, a Jerusalem think tank. "It will take a while to massage the partners into willingness to hear about very costly and independent, unilateral moves."

Olmert inherited Kadima leadership after Ariel Sharon, the country's most popular politician and the party's founder, suffered a stroke in January and lapsed into a coma. Much of Kadima's campaign was built around Sharon.

After a cautious transition period, Olmert laid out his own political program, saying he would aim to draw Israel's final borders by 2010 -- with or without an agreement from the Palestinians.

Under Olmert's plan, Israel would unilaterally dismantle dozens of settlements deep in the West Bank, while beefing up major settlement blocs and incorporating them inside Israel's borders.

While handing over large chunks of the West Bank to the Palestinians, the plan falls short of Palestinian claims to all of the territory. Israel captured the West Bank in the 1967 Mideast war.

The go-it-alone approach follows Sharon's unilateral pullout from the Gaza Strip last summer. With peacemaking at a standstill, Sharon said Israel had to "disengage" from the Palestinians to improve security and guarantee its future as a Jewish democracy.

Hawkish parties that oppose concessions to the Palestinians fared poorly, winning just 32 seats. Likud leader Benjamin Netanyahu, a former prime minister, was among the biggest losers.

"We have no doubt that the Likud suffered a hard blow," Netanyahu told his party activists. He blamed Sharon, who bolted Likud to form Kadima, for leaving behind "a broken and shattered party," and vowed to lead the party back to glory.

Jewish settler leaders, who oppose any West Bank withdrawal, also scrambled to contain the damage. "We don't think that Olmert got a mandate to go ahead with his destructive plans," settler leader Shaul Goldstein said. "We will find a way to protest and battle, but we won't be dragged to violence."