Olmert and his government enjoyed healthy relations with the Fatah-led Palestinian National Authority, which culminated in November 2007 at the Annapolis Conference. However, during his tenure as Prime Minister, there were major military conflicts with both Hezbollah and Hamas (predominately in the Gaza Strip). Olmert and Minister of Defense Amir Peretz were heavily criticized for their handling of the 2006 Lebanon War. In late 2008, a ceasefire between Hamas and Israel ended, which led to the 2008–2009 Israel–Gaza conflict. Olmert declared that the Israeli Defense Force would target the Hamas leadership and infrastructure in the war.

Throughout his premiership, Olmert was accused of corruption. Facing a challenge for the leadership of Kadima from Foreign Minister Tzipi Livni, on 30 July 2008, Olmert announced that he would not seek re-election as party leader and that he would resign from his position as Prime Minister immediately after a new Kadima leader was named. Livni won the contest and sought to form a new government in September of that year. However, Livni's attempts at forming a new government were unsuccessful and instead an election was scheduled for February 2009. On February 20, Israeli President, Shimon Peres, chose Benjamin Netanyahu to become the new Prime Minister and asked him to form a Coalition Government, after there was no clear victory in the elections. Netanyahu succeeded Olmert on 31 March 2009.

On August 30, 2009 an indictment against former prime minister Ehud Olmert was served at the Jerusalem District Court. The indictment includes the following counts: obtaining by fraud under aggravating circumstances, fraud, breach of trust, falsifying corporate documents and tax evasion. The indictment refers to three out of the four corruption-related cases standing against him: 'Rishontours', 'Talansky' (Also known as 'Money envelopes' affair) and the 'Investment Center' .

Born near Binyamina in the British Mandate of Palestine, Olmert is a graduate of the Hebrew University of Jerusalem with degrees in psychology, philosophy and law.

According to Olmert, his parents, Bella and Mordechai escaped "persecution in Ukraine and Russia and found sanctuary in Harbin, China. They emigrated to Israel to fulfill their dream of building a Jewish and democratic state living in peace in the land of our ancestors." His father later became a member of the Knesset for Herut. Olmert's childhood included membership in the Beitar Youth Organization and dealing with the fact that his parents were often blacklisted and alienated due to their affiliation with the Jewish militia group the Irgun. They were also part of Herut, the opposition to the long-ruling Mapai party. However, by the 1970s this was proving less detrimental to one's career than during the 1950s, and Olmert succeeded in opening a successful law partnership in Jerusalem.

Olmert served with the Israel Defense Forces in the Golani combat brigade. While in service he was injured and temporarily released. He underwent many treatments, and later completed his military duties as a journalist for the IDF magazine BaMahane. During the Yom Kippur War he joined the headquarters of Ariel Sharon as a military correspondent. Already a member of the Knesset, he decided to go through an officer's course in 1980 at the age of 35.

In 1966, during the Gahal party convention (a predecessor to today's Likud), party leader Menachem Begin was challenged by the young Olmert, who called for his resignation. Begin announced that he would retire from party leadership, but soon reversed his decision when the crowd emotionally pleaded with him to stay.

Olmert was first elected to the Knesset in 1973 at the age of 28 and was re-elected seven consecutive times. Between 1981 and 1989, he served as a member of the Foreign Affairs and Defense Committee and served on the Finance, Education and Defense Budget Committees. He served as Minister without Portfolio, responsible for minority affairs between 1988 and 1990, and as Minister of Health from 1990 until 1992. Following Likud's defeat in the 1992 election, instead of remaining a Knesset member in the opposition, he successfully ran for Mayor of Jerusalem in November 1993.

Between 1993 and 2003, Olmert served two terms as Mayor of Jerusalem, the first member of Likud or its precursors to hold the position. During his term in office, he devoted himself to the initiation and advancement of major projects in the city, the development and improvement of the education system, and the development of road infrastructure. He also spearheaded the development of the light rail system in Jerusalem, and the investment of millions of shekels in the development of mass transportation options for the city.

While Mayor of Jerusalem, Olmert was an invited speaker at an international conflict resolution conference held in Derry in Northern Ireland. In his address, he spoke of how "Political leaders can help change the psychological climate which affects the quality of relationships among people." His speech concluded with reflections on the importance of political process in overcoming differences: "How are fears born? They are born because of differences in tradition and history; they are born because of differences in emotional, political and national circumstances. Because of such differences, people fear they cannot live together. If we are to overcome such fear, a credible and healthy political process must be carefully and painfully developed. A political process that does not aim to change the other or to overcome differences, but that allows each side to live peacefully in spite of their differences."