Tzipi Livni, Israel's foreign minister and new head of the ruling Kadima party, began preparing yesterday to put together a coalition government that would allow her to take over as prime minister.

At dawn final results were released showing how narrowly she won the Kadima leadership primary, defeating her closest challenger, Shaul Mofaz, the hawkish transport minister, by 431 votes. Livni took 43.1% of the vote, against 42% for Mofaz. Exit polls had predicted a clear win for Livni, but proved wide of the mark.

Livni, 50, a former agent in the Mossad secret service and a lawyer, has six weeks to put together a coalition government around her party. If she succeeds she will be prime minister, the first woman in the job since 1974. If she fails general elections will be held by early next year.

After a sleepless night waiting for final results, Livni emerged from her Tel Aviv home early yesterday to say she wanted to quickly form a coalition.

Already some of the smaller parties that might expect to be in the coalition began laying out their demands, notably among them Shas, which represents ultra-Orthodox voters. Shas, which has 12 seats in the Knesset, or parliament, is adamantly opposed to any division of Jerusalem, which might complicate Livni's commitment to negotiate a two-state peace agreement with the Palestinians. One of the core issues of any agreement is the future of Jerusalem, which both Israel and the Palestinians claim as a future capital.

"If it becomes clear that Jerusalem is on the negotiating table ... then we won't be part of the coalition," Shas spokesman Roi Lachmanovitch said yesterday.

Kadima has 29 seats in the 120-seat Knesset and will need Labour's 19 seats, as well as other smaller parties, probably including Shas. Livni has also proposed reaching out to the left-wing Meretz party, which has five seats.

Prime minister Ehud Olmert, the former Kadima leader who is facing several corruption investigations, is expected to notify the cabinet on Sunday that he will resign but will continue as a caretaker leader until Livni forms her coalition.

The result of the Kadima vote raises awkward questions about Israel's leading polling organisations, which in the weeks before the election and in exit polls 15 minutes before voting ended on Wednesday predicted Livni would win easily. "There is a problem and we have to identify it," said pollster Mina Tzemach, director of the Dahaf Research Institute.