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
Tzipi Livni Olmert decided to step down, and asserted her confidence in her ability to defeat him in a party election should he decline. However, her call was ignored by Olmert and her decision to stay in the Cabinet sparked some controversy. In 2008, Livni condemned a photomontage of Pope Benedict XVI with a swastika displayed on his chest, which was published on a website run by supporters of her Kadima party. Facing multiple criminal investigations for corruption, Ehud Olmert announced his intention to resign his post as prime minister following a Kadima leadership election, which was held on 17 September 2008.