Shaul Mofaz moved from the position of Defense Minister and received the Transport ministry in the new Cabinet installed on 4 May 2006. In 2008, with Israel's then prime minister, Ehud Olmert, being pressured to resign due to corruption charges, Mofaz announced that he would run for the leadership of the Kadima party. On 5 August 2008, Mofaz officially entered the race to be leader of Kadima. That same day he received a blessing by Shas spiritual leader Rabbi Ovadia Yosef. On 17 September 2008, he lost the Kadima party election, losing to Tzipi Livni for the spot of the Prime Minister
2008 Kadima leadership election count turned out much closer, amid very low turnout, with Shaul Mofaz coming within a few hundred votes of winning an unexpected victory over Livni. Supporters of Mofaz called for a recount but Mofaz rejected any legal challenge of the declared result and called Livni to congratulate her on her victory, as did Sheetrit and Dichter. After Mofaz's loss, he announced that he would be taking a break from politics and leaving the government and Knesset. However, he would remain a member of Kadima. Soon after, however, he announced his return and won the 2nd place in Kadima's Knesset list