TEL AVIV (AFP) -- Israeli Defense Minister Amir Peretz has been ousted as Labour party chief, leaving an ex-premier and a former general neck and neck in a key primary which threatens Prime Minister Ehud Olmert's ruling coalition, official results showed Tuesday.

Peretz came in a distant third in Monday's primary, with former prime minister Ehud Barak and former domestic security chief Ami Ayalon heading to a run-off ballot, according to a near-complete official count.

Based on a count of 99.7 percent of the vote, the electoral commission said Barak had won 35.7 percent, Ayalon 30.7 percent and Peretz 22.3 percent.

A candidate needed to garner at least 40 percent of votes cast to avoid a second-round ballot which would take place in two weeks.

Peretz -- whose ratings have dropped to single digits after a government inquiry blasted him for failing in his duties during last year's Lebanon war -- received between 17 and 19 percent, according to the polls.

Barak is hoping to stage a political comeback after a six-year absence, while Ayalon is aiming to burst on to the national political stage having never held senior political office.

Ayalon's legal advisors appealed to Labour's central election committee to investigate alleged fraud in voting in the Arab sector, where Barak enjoys broad support.

Barak and Ayalon have warned that they would pull Labour out of Olmert's coalition cabinet unless the beleaguered premier steps down in the wake of a biting report of his handling of the Lebanon war.

Ayalon has vowed to do so immediately and Barak has said he would serve in Olmert's government as defense minister until early elections are held.

Should Labour and its 19 MPs quit the government, it would leave Olmert's coalition with the support of just 59 MPs -- two short of a majority in the 120-seat parliament.

This would leave the premier with three options -- to resign, to try to form a new right-leaning coalition or to call new general elections.

Barak, Israel's most decorated soldier and a former chief of staff, emphasized his security background in a last-minute appeal to voters, and promised to heal a crisis of confidence in the nation's leadership following the inconclusive 34-day war against Hezbollah last year.

"I tell voters two things: first, just think of who you want to have at time of war, and second that only I can beat" main opposition leader and former premier Benjamin Netanyahu in an election, Barak said as he voted near his home outside Tel Aviv. Ayalon has vowed to "reinforce security and combat terrorism, corruption, put the peace process back on track and make education a priority."

"I will unite the Labour party around me and together we will lead it to power," he said as he cast his ballot several kilometres (miles) from his home near the northern city of Haifa.

The two front-runners have sharply contrasting public images.

Ayalon is seen as untainted by graft and has a security background, but he is also a political novice, never having held a ministerial portfolio. He was elected to parliament for the first time only last year.

Barak has impeccable military experience and a long list of political posts, but has not shaken off the tag of failure over the breakdown of peace talks with the Palestinians at Camp David in 2000.