Former Prime Minister Ehud Olmert is mulling starting up a new center-left political party, along with Kadima cohorts Haim Ramon and Tzipi Livni, and weighing running for prime minister in new elections, set to take place within three months.

"I'm speaking with Olmert, who of course hasn't made his decision. I'm talking to him," Ramon told Army radio on Wednesday.

Kadima could potentially join forces with former newsman Yair Lapid's fledgling Yesh Atid (Future) faction to put together a bloc, according to The Jerusalem Post.

"There is a lot of pressure on him to run," a Olmert colleague told the newspaper, but cautioned that "He has not decided or taken any steps."

After a nearly four-year tenure, Prime Minister Benjamin Netanyahu on Tuesday announced that general elections would be held "as soon as possible," for the 19th Knesset (parliament), without specifying an exact date.

Netanyahu, who made the announcement during a prime time press conference, said the decision was made after failing to achieve a majority within his 66-seat coalition to pass next year' s budget.

"Today, I finished a round of consultations with the heads of the coalition parties and I came to the conclusion that it is not possible at this time to pass a responsible budget," said Netanyahu in his nationally televised speech.

Olmert, for his part, the source said, "is very upset at the way Netanyahu has handled relations with the United States and the Iranian and Palestinian issues, and he is concerned about what could happen with four more years of Netanyahu in power."

Olmert, who served as Israel's prime minister between 2006 and 2008, was convicted in July on breaching public trust in what was dubbed the Investment Center Affair.

He was convicted of improprieties during his tenure as Industry, Trade and Labor Minister between 2003 and 2005. The court acquitted Olmert of two other charges, which led to his resignation in 2008.

Ramon, meanwhile, ruled out chances that current party chief Shaul Mofaz - who had temporarily joined Netanyahu's current Likud- led coalition - might lead the new party bloc, the newspaper said.

"I think Mofaz removed himself from being a possibility," he said, "As far as I'm concerned, Netanyahu will be replaced. We won 't make the same mistake that Mofaz made."

Israel's opposition leaders offered mixed reactions to the prospect of elections, and their political futures.

Mofaz told Israel's Channel 2 television that he expected his party to replace Netanyahu, and stressed that he is the "candidate with the most experience."

Meanwhile, former Kadima leader Tzipi Livni said Netanyahu "has made Israel isolated and withdrawn" from the world. She added on her Facebook page that the people of Israel will have to choose their path again.

Labor party leader Shelly Yehimovich applauded the move, saying that she may ask Livni, who lost Kadima's leadership to Mofaz in March, to join her party for the next elections.

Interior Minister Eli Yishai, leader of the ultra-Orthodox Shas party, also welcomed Netanyahu's decision and argued that it was expected and that his party would never support cuts in the general budget.

"Shas would not support a budget that tramples the middle class and the poor," Yishai said.

The ultra-Orthodox parties openly rejected the expected budget cuts which would slash NIS 14 billion billion U.S. dollars) dedicated to education and welfare, of which many ultra-Orthodox Jews in Israel are beneficiaries.