Israel's army chief, under fire for selling shares hours before launching an offensive in Lebanon, was looking set to become the first head to roll in the outcry over the state's handling of the month-long war.

Israel's media have piled opprobrium on Dan Halutz since the Maariv newspaper revealed Tuesday that he had sold shares hours before the start of the Israeli offensive in Lebanon on July 12.

The story, confirmed by Halutz himself, has focused the anger of many in a country struggling to come to terms with the less than decisive outcome of its war against the fundamentalist Hezbollah militia sparked on July 12.

"There's an old Romanian saying that goes like this: 'the country is burning, but grandma is combing her hair.' The country was on fire, and all that interested Halutz was his investment portfolio," member of parliament Colette Avital said Tuesday.

Resignation calls have come from parliament but also from the highest circles of the defence establishment.

Defence Minister Amir Peretz, also under fire for his performance since the start of the war on July 12, defended the army chief's "loyalty and dedication".

"His attention is entirely devoted to the war and the success of the army's missions," said Peretz in a statement.

"This regrettable affair would never have captured so much attention had the Lebanon campaign ended with clearcut victory" for Israel, said Mark Heller, an analyst with the Jaffee Centre for Strategic Studies.

"It is possible that the general made mistakes, but he certainly isn't the only one, whether at the political or military echelons," he told AFP.

Newspapers pilloried Halutz Wednesday, using the scandal to vent their anger at the man whose forces suffered unexpected setbacks at the hands of well-armed Hezbollah militiamen.

Maariv's editorial writer Ben Caspit was confident that the public's perception of a general who tries to save his stocks portfolio whilst sending his troops to the front lines would spell the end of his career.

"He entered this war as a prime minister designate. He is leaving it on a stretcher," he wrote.

The appointment last year of the former air force chief to the position of chief of staff had received a lukewarm reception within the ranks of the military, where some senior officers argued that a pilot was ill-suited for the top job.

Halutz was often criticised for being arrogant and over-estimating the air force.

The reproach returned to haunt him over the past month as it gradually emerged that Israel's fighters jets were failing to inflict enough damage on Hezbollah, which continued to rain rockets on northern Israel until the last day of the war.

When he was still air force chief, Halutz had ignited a controversy in 2002 when he said he had not lost any sleep over the death of 14 civilians in a strike of a top Palestinian militant in Gaza.

The sale of his shares caused a bigger stir.

The army chief sold shares worth 26,000 dollars on July 12 at noon, three hours after the Hezbollah border attack which left eight soldiers dead and two in the hands of the Lebanese militia.

A day later, the Tel Aviv Stock Exchange's TA-25 index had lost 8.3 percent.

Halutz did not deny he had sold his shares but charged he was the victim of a smear campaign.

"They've made me into a Shylock... I've gone into a tailspin, but I'll pull out," he was quoted as saying by Wednesday's newspapers.

Copyright © 2006 Agence France Presse

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