Prime Minister Ehud Olmert is discovering that while politics may be his strength, running the State of Israel may not be. His political acumen may have served him well while managing the affairs of the city of Jerusalem and in building a coalition, but on the domestic as well as on the international front he seems to be under serious stress.

Unlike President Bush, who is struggling to develop a governing strategy for his final two years in office and to ensure his place in history, Olmert needs to demonstrate to the Israeli public that, despite the fiasco last summer in the Lebanon War, he even is able to govern the country. Failing this, he may well bring down his adeptly built coalition before his own term expires — as well as prior to the 2008 U.S. presidential elections.

Olmert’s problem can be seen in his lack of independent management control as well as a continued willingness to be seen as Washington’s lackey. While Israeli leaders have always suffered from a media frenzy whipped up both by their opponents and even putative allies, most previous prime ministers generally could draw the line, often by threatening critics with political and coalition sanctions. This is a skill Olmert has not exhibited.

The head of military intelligence and the director of the Mossad (who until a few years ago operated under a shield of total anonymity) are battling in public, in the press, over their own respective recommendations for a Syria strategy. It’s bad enough that foreign-policy experts and the media are lining up on all sides of the debate, but now the country’s chief intelligence mavens are engaging in public discussions. All the while the prime minister appears merely to be to taking his cues from Washington.

This is especially true in his willingness, or lack thereof, in engaging the Palestinians. Direct talks with President Mahmoud Abbas, opening up the flow of goods from Gaza, permitting the transfer of weapons to Abbas’ Fatah forces, and the return of the first $100 million of Palestinian taxes all flowed from the Bush administration’s perceived desire to implement at least this aspect of a new Middle East policy. At the same time, Olmert could take Washington’s slap on the wrist for opening a transparent and clearly politically motivated new West Bank settlement for the 2005 evacuees from Gaza, and the United States could prepare the region and its allies to be less critical of the forthcoming escalation of U.S. troops in Iraq.

On the military side, the Winograd Commission investigating the failures in the conduct of the Lebanon War will issue its report in the spring. It appears to be conducting its work in an appropriately quiet and businesslike manner. Lacking the authority of a national investigating commission, however, its conclusions may well avoid implementation. At the same time both the political and military suspects from last summer’s failures are posturing themselves to withstand likely criticisms. The military has already increased its reservists’ training regimen. It has also developed more appropriate training modes to fight the next war, much of the strategic as well as tactical programs reportedly having already been shared with the United States in its battles in Iraq.

The new Olmert coalition, bolstered by the addition of Avigdor Lieberman and his cohorts, passed a budget for the new year in record time and with minimal opposition. All parties knew the outcome was inevitable, absent a desire from any of the various factions within and without the coalition to push for immediate elections. All of this might change very rapidly this spring as the various party elections are held and Olmert faces the reality that his Kadima Party may indeed be a one-time phenomenon absent the dramatic development of a serious local and regional party structure.

The one truly remarkable blooming flower in Israel is a robust, booming economy despite August’s economically debilitating war. Hi-tech biomedical research and product development, coupled with the dramatic increase in domestic and foreign venture capital, have stimulated a further economic expansion. While there continues to be serious dislocation among certain segments of the underclass — specifically among Ethiopians and Sephardim — unemployment is dropping as production and exports expand. The shekel continues to be strong, despite the Bank of Israel’s decision to increase interest rates.

None of this can be attributed to specific innovations of the Olmert government. In fact, the government’s failure to adequately and sensitively address the needs of Israeli Arabs, especially in the damaged North, as they have begun doing for Jewish towns and villages, has only damaged the government’s reputation for independence and innovation.

To top it all off, Israelis had another reason last week to link their beleaguered premier with the powers that be in Washington: When residents of the respective capitals even smell snow, both cities become totally dysfunctional.