JERUSALEM — A court decision this week may have left Israeli Prime Minister Benjamin Netanyahu with a strong contender for leadership of the Likud Party.

Soon after the Tel Aviv District Court cleared Jerusalem Mayor Ehud Olmert of charges of campaign finance fraud, Israeli analysts were speculating that Olmert would begin his quest to replace Netanyahu as the Likud candidate for prime minister in the national elections scheduled for the year 2000.

Olmert, 51, has attempted to portray himself as a harder-line defender than Netanyahu of Israel's claim to Jerusalem.

A year ago, Olmert was on hand at the opening of a new entrance to an archaeological tunnel near the Western Wall. The move sparked three days of Palestinian rioting that left 15 Israelis and 61 Palestinians dead.

Olmert, who was elected Jerusalem's mayor in 1993, has also been a staunch defender of Israel's right to build a new Jewish neighborhood at Har Homa in southeastern Jerusalem.

The start of that construction in March led the Palestinian Authority to suspend all negotiations with Israel.

In Sunday's decision, the court found Olmert innocent of charges that he had engaged in financial irregularities in the 1988 election campaign, when Olmert was treasurer of the Likud Party.

Olmert said Sunday his only mistake was that he signed financial reports without double-checking them.