JERUSALEM, July 10 (Reuters) - Former Israeli Prime Minister Benjamin Netanyahu looked virtually assured of reelection as leader of the rightist Likud party after it gave him a key vote of confidence on Tuesday.

Likud's central committee voted to hold an early party primary on Aug. 14 that Netanyahu looked almost certain to win since his only challenger is a marginal far-right politician.

Netanyahu's main rival, Silvan Shalom, a former foreign minister, and a more moderate candidate who lost to Netanyahu in the last party primary, has dropped out of the race.

American-educated and a former ambassador to the United Nations, Netanyahu, 57, has been a favourite in opinion polls over Israeli Prime Minister Ehud Olmert whose popularity has plummeted since a criticised war last year in Lebanon.

Netanyahu focused on the war in his speech to party loyalists. He said Israelis "remember this war in a painful way. It's a year since the failure, a year of wavering."

Israeli media said the party's decision meant there would be no further leadership contests in Likud before Israel's next general election now scheduled for 2010, though Olmert's political rivals have sought to have one as soon as next year.

Netanyahu also served as finance minister. His policies were credited with rebuilding an Israeli economy shattered by a Palestinian uprising of seven years ago. He quit the post in 2005 in protest against Israel's withdrawal from Gaza.

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