Sept 17 (Reuters) - Israeli Foreign Minister Tzipi Livni appeared to win an election on Wednesday to succeed Prime Minister Ehud Olmert as leader of the ruling Kadima party, exit polls by major broadcasters showed.

The following is reaction from Israeli and Palestinian leaders and analysts:

CHIEF PALESTINIAN NEGOTIATOR AHMED QURIE

"Because Livni was immersed in the peace process, we believe she will pursue peace moves with us. We welcome the choice of the Israeli people."

HAMAS OFFICIAL SAMI ABU ZUHRI

"Livni's victory in the primaries of the Kadima party is another sign of the collapse of Israeli society after the departure of (Israel's) founding generation and the take over by weak personalities started with Olmert and then Livni. From a political perspective, there is no change in (Israel's) direction or leadership policies towards the Palestinians."

RANAN GISSIN, AIDE TO FORMER ISRAELI PRIME MINISTER ARIEL SHARON

"This is the beginning of a very arduous road to become prime minister. She (Livni) needs to reach a consensus at home because otherwise Kadima will fall apart at the seams.

"The challenge for Kadima is to stand on its own. Kadima was formed by Sharon. It is moulded after him. Now we've come to the next stage.

"You've got to form a coalition. This requires a government that can take decisions, that has a broad enough base, to take critical decisions that are facing Israel, whether it's war or peace.

"The question is whether she can form a stable coalition government that not only ensures Kadima stays in power but can use its power to enact policy."

DANI DAYAN, HEAD OF THE MAIN JEWISH SETTLERS ORGANISATION IN THE OCCUPIED WEST BANK

"Livni's positions are no different from those of Olmert, and his government's political failings will continue if she becomes prime minister."

SHALOM SIMCHON, CABINET MINISTER FROM LEFT-LEANING LABOUR

"I have no problem with congratulating Tzipi on her smooth, absolute and clear victory. But I don't think we find ourselves in a situation that warrants congratulations, but rather in a situation where we must understand what's good for the state of Israel.

"And what's good for the state of Israel is to go to elections and decide who is the person most suited to head the government. And of course I'm absolutely convinced that that is (Labour leader and Defence Minister) Ehud Barak."

JONATHAN KATZ, ECONOMIST AT HSBC

"Livni clearly will do all she can to form a coalition because early elections are bad for the party...

"That will mean caving into demands from religious parties like Shas for increased spending and child allowances.

"She is a politician and a big unknown, so she will do all she can to keep a shaky coalition together, which may be negative for fiscal credibility." (Reporting by Adam Entous, Ori Lewis, Dan Williams and Steve Scheer in Jerusalem; and Wafa Amr in Ramallah; Editing by Elizabeth Piper)

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