Oct 31 (Reuters) - Israel's parliament has set a date of Feb. 10 for an election triggered by the resignation of Prime Minister Ehud Olmert and the failure of his designated successer Tzipi Livni to form a new ruling coalition.

The 120 seats in the single-chamber Knesset are allocated by proportional representation to national party lists. On March 28, 2006, 12 parties secured seats after passing the threshold of winning at least 2 percent of the national vote. These are the biggest contenders for the next election:

KADIMA - Founded in 2005 by Prime Minister Ariel Sharon when he led much of Likud into alliance with Labour rebels to promote a security plan to pull troops from Gaza. When Sharon fell into a coma, Olmert led Kadima to a 29-seat triumph in 2006 but lost support over that year's Lebanon war. A graft scandal led to his resignation. Last month's election of Livni, who heads Israel's team in U.S.-sponsored peace talks, as Kadima leader lifted the party in opinion polls. She backs creating a Palestinian state as outlined in 1990s' agreements and is promoted as a "Mrs Clean" who can break with past corruption. But her failure to win coalition allies leaves the centrist party facing an electoral test that may define whether it has arrived for good or was just a flash in the pan. Its name means Forward.

LIKUD - Filleted by Sharon, the main party of the right crashed to 12 seats in 2006. Its leader is Benjamin Netanyahu, who as finance minister and prime minister in the 1990s claimed credit for a hi-tech-led boom that followed his easing of state economic control. Olmert's woes have aided Likud, though polls suggest Livni may be a stiffer opponent. Likud backs a two-state solution to end the Palestinian conflict. But the party which began the barrier round the West Bank is sceptical Israel can be secure if it ends the occupation and criticises Livni for being ready to give back land, including in Jerusalem. Members often rebuff charges they oppose any negotiated peace by noting it was Likud leader Menachem Begin who secured Israel's first treaty with the Arabs, when he signed a pact with Egypt in 1979.

LABOUR - Having ruled for the first half of Israel's 60-year history, driving expansion under leaders like David Ben-Gurion and Golda Meir, Labour then forged land-for-peace accords with the Palestinians in the 1990s under Yitzhak Rabin and Shimon Peres. Peres, now ceremonial head of state, defected to Kadima and the main party of the left could fade to third place amid disillusion following the violence of the past decade. With 19 seats, Ehud Barak has led Labour in its coalition with Kadima since he returned to politics in 2007. As premier in 1999-2001, the former army chief failed to clinch a final deal with the Palestinians and Labour was voted out as violence flared. Defence minister under Olmert, Barak stepped up a blockade and military strikes on the Hamas-run Gaza Strip but polls indicate he is failing to turn that hard line into voting intentions.

SHAS - Whoever becomes prime minister will probably have the Union of Sephardic Torah Observers in the cabinet. A fixture in successive coalitions, the ultra-Orthodox Shas party effectively triggered the election by refusing to back Livni. Eli Yishai, who leads 12 members of parliament, blamed the new Kadima chief because she would not rule out sharing Jerusalem with the Palestinians. She accused him of "extortion" for trying to secure more welfare benefits to help Shas's mostly poor supporters. These are drawn from the fast growing community of religious Jews of Middle Eastern origin whose spiritual leader is the 88-year-old, Iraqi-born rabbi Ovadia Yosef.

YISRAEL BEITEINU - Avigdor Lieberman's Russian-accented, gravel-strained Hebrew has been music to the ears of many of the million Israelis who came from the former Soviet Union since the 1980s. Now controlling 11 seats, the former aide to Netanyahu founded Our Home is Israel in 1999 (when Moscow's ruling party was called Our Home is Russia). He says Israel's 1.5 million Arabs and some of their land should be "swapped" for West Bank Jewish settlements. He quit Olmert's coalition in January over the start of talks with the Palestinians. Russian-speakers who back Lieberman include some who thrived in the hi-tech boom and others who survive on welfare. Many do not observe Jewish ritual and oppose what they see as Orthodox attacks on their lifestyle.

OTHER PARTIES - Nearly a third of parliamentary seats is held by minor parties. MERETZ (5 seats) is left-wing party not in the outgoing coalition. Along with a group of parties, HADASH, UNITED ARAB LIST and BALAD, representing Israel's Arab citizens and which together have 10 seats, it supports making concessions for peace. UNITED TORAH JUDAISM (6 seats) represents ultra-Orthodox Jews of Ashkenazi, or European, background. NATIONAL UNION/NRP (9), is an ultra-right religious coalition that demands an end to peace talks. Finally, the PENSIONERS have 7 seats and speak out for Israel's growing older population. (Writing by Alastair Macdonald; Editing by Samia Nakhoul)

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