UPDATE 4-Israel's Barak, architect of Iran policy, quitting ...

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* Was key player in Israel-Iran policy

* Says wants to spend more time with his family

By Dan Williams and Jeffrey Heller

JERUSALEM, Nov 26 (Reuters) - Israeli Defence Minister Ehud Barak, a leading strategist in confronting Iran over its nuclear programme, said in a surprise announcement on Monday that he would quit political life after the Jan. 22 national election.

Some commentators speculated Barak was trying to duck a trouncing for his tiny centrist party in the ballot, after which Prime Minister Benjamin Netanyahu, who heads the front-running, right-wing Likud, might return him to defence and military headquarters as a professional appointee.

But others said 70-year-old Barak, who has served as prime minister and armed forces chief, may have had enough of campaigning and wanted to focus on resolving the Iranian issue before leaving his post.

"I stand before you to share my decision to resign from political life and not to run in the coming election for the Knesset," Barak told a news conference, adding he would stay on as defence chief until a new administration is sworn in.

Speaking five days after an eight-day Gaza offensive ended in a ceasefire with the enclave's Hamas Islamist rulers, Barak said he wanted to spend more time with his family and that politics "has never been a passion of mine".

Should Barak's resignation prove permanent his successor would likely come from Likud ranks. He might even be replaced by the current foreign minister, Avigdor Lieberman, the Likud's more hawkish coalition partner.

Few doubt that this would affect the tenor of a ministry that oversees everything from armed conflict to administration of occupied Palestinian territory to liaising with regional power-broker Egypt.

Danny Yatom, an old army comrade of Barak's who went on to serve as head of the Mossad spy agency, described him as a "moderate anchor" for a Netanyahu government whose sabre-rattling on Iran has often raised the hackles of the United States and other Western countries.

Yet Yatom, who served under Netanyahu during his first term as prime minister in the late 1990s, said the Israeli leader appeared to be patching up his testy ties with Barak Obama since the U.S. president's re-election three weeks ago.

"I would think and hope that this relationship will provide the main guide for government policies" on Iran, Yatom said.

With Netanyahu, Barak has been at the forefront of Israel's campaign for stronger international sanctions against Iran to halt what Israeli and Western leaders fear is a drive to produce nuclear weapons, allegations Tehran denies.

Raising speculation Israel could defy its main ally, the United States, and attack Iran on its own, Barak has cautioned that Tehran was nearing a "zone of immunity" that would put deeply buried and fortified nuclear facilities out of reach of Israel's military capabilities.

But last month, he told Britain's Daily Telegraph newspaper that an immediate crisis was avoided when Iran chose to use more than a third of its medium-enriched uranium for civilian purposes earlier this year.

The decision, he said "allows contemplating delaying the moment of truth by eight to ten months".

"LEADING ADVOCATE"

Dennis Ross, a veteran U.S. envoy and former Obama adviser, called Barak "perhaps the leading advocate for military action against Iran".

"He has had very close relationships with his U.S. counterparts, and while that has had an influence on his readiness to act militarily against Iran, he has been prepared for a unilateral Israeli strike if he thought that would be necessary," Ross told Reuters.

"Whoever would replace him in the next government will be hard-pressed to have the same stature or influence both with the prime minister (Netanyahu) and with us," he said.

Barak is both Israel's most-decorated soldier and embraced abroad since his breakneck peacemaking campaigns during a brief tenure as prime minister in the mid-1990s. He has lent public credibility to Netanyahu's veiled threats to attack Iran should diplomacy fail to curb its disputed uranium enrichment.

But after Netanyahu, in a September speech at the United Nations, said Israel's "red line" on Iran now fell in mid-2013, Barak signalled that any war with the Persian power could wait.

Israeli officials say contingency plans for Iran have been in place for months, awaiting a green light from the government.

Such open discourse over a showdown that would stretch Israel's military capabilities to the limit suggested a possible bluff - or at least, that Netanyahu and Barak, both former commandos schooled in subterfuge, hoped to achieve some kind of tactical surprise when the time came to pull the trigger.

Some might see a ruse in the show of retiring Barak who, on the eve of Israel's shock 2008-2009 war in Gaza, made an unannounced live appearance on a top-rated Israeli television satire, seemingly to help drop the Palestinians' guard.

With two months remaining until the election and several more weeks for the new coalition government to be formed, Barak said on Monday he would continue to deal with "many challenges" on the national security front, leaving open the possibility he would be part of fresh military actions in the interim.

Vice Prime Minister Moshe Yaalon of the Likud appears to be a front-runner to replace Barak after the election, should Netanyahu, as expected, form the next government.

He has sword-rattled about Iran more volubly than Barak and, while the defence minister spoke in favour of U.S. President Barack Obama before his reelection this month, Yaalon had accused the Democratic administration of being soft on Tehran.

Other candidates to succeed Barak, according to defence officials, include Avi Dichter, a former security chief who is now the Likud minister in charge of preparing the homefront for war, and Lieberman, currently foreign minister.

As the only centrist member of the governing coalition of right-wing and pro-settler parties, Barak has frequently visited Washington for talks with top U.S. officials and had criticised Netanyahu for airing differences with the United States.

In a statement, Netanyahu said he "respects Defence Minister Ehud Barak's decision and thanks him for his cooperation in the government and highly appreciates his long-standing contribution to the security of the state".

The Hamas movement ruling Gaza saw Barak's decision to quit as proof that this month's Israeli assault on the enclave was a disaster.

"This is evidence of the political and military failure that the government of Netanyahu and his defence minister suffered," said Hamas spokesman Fawzi Barhoum.

Israel has called its offensive a success, saying it destroyed most of Hamas's long-range rocket arsenal and killed the Islamist group's top militants.

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