By Jeffrey Heller

JERUSALEM, Oct 18 (Reuters) - Israel's commission of inquiry into the 2006 Lebanon war said on Thursday it would issue its final report by year's end, fuelling speculation it would stop short of recommending Prime Minister Ehud Olmert resign.

The government-appointed panel, in interim findings in April, sharply criticised Olmert, saying he acted hastily in launching the campaign after Hezbollah guerrillas seized two Israeli soldiers in a cross-border raid from Lebanon.

But announcing its intention to issue a final report by the end of the year, the Winograd Commission said speedy publication was its "top priority" and would have "ramifications on the issues and interests which will be included" in the findings.

Official Israeli inquiries into past conflicts, in which recommendations were made for government leaders to step down, were accompanied by letters from the panels warning key decision-makers they could be harmed by their findings.

In its statement, however, the Winograd Commission said it had no plans to issue such letters -- a process that could delay a final report for months if government leaders and military officers sought legal counsel.

Israeli political commentators interpreted the announcement as meaning the commission would stop short of "drawing personal conclusions" that could give formal imprimatur to public demands that Olmert quit.

An Israeli newspaper, citing sources in the panel of three jurists, a former general and an academic, reported earlier this month the commission would not recommend Olmert resign.

The newspaper report quoted commission head Eliahu Winograd as saying elected representatives should be judged at the ballot box.

ROCKETS

During 34 days of fighting, Hezbollah managed to fire 4,000 missiles into northern Israel, driving a million residents to shelters and shaking the belief of many Israelis in their country's military supremacy in the region.

Some 1,200 people, including about 900 civilians, were killed in Lebanon, where Israeli planes pounded southern Beirut neighbourhoods and other Hezbollah strongholds, while 117 Israeli soldiers and 41 civilians died.

Olmert, whose wartime armed forces chief resigned in disgrace, has vowed to survive the Winograd commission report's fallout and serve out his term in office.

But he is embroiled in three criminal investigations of alleged corruption. He has denied any wrongdoing.

The Israeli leader, who lacks a military pedigree, has argued the war improved Israel's security by banishing Iranian- and Syrian-backed Hezbollah from its frontier strongholds and boosting a U.N. peacekeeper force in southern Lebanon.

After the commission's announcement, there was no immediate comment from Olmert, who flew to Moscow on Thursday to discuss Iran's nuclear programme with Russian President Vladimir Putin.

Some Olmert critics had predicted the inquiry board would pull its punches, noting it was appointed by the government despite public calls for a more independent panel.

In its statement, the commission said it wanted to wrap up its work quickly so that its final findings could be used as the foundation for correcting faults it uncovered in the way the war was waged.

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