future, after a speech in New York late Monday during which he renewed criticism of Prime Minister Benjamin Netanyahu's handling of the Israeli-Palestinian conflict.
He said a decision to announcement new settlements in a sensitive occupied area was "certain to offend" the United States after it backed Israel in opposing the Palestinian bid to become a non-member state.
"To be honest with you, I am not sure there was a reason to oppose the request from the Palestinian Authority to upgrade their status," Olmert said in his speech.
Olmert, who is seeking to rebound from a corruption case that forced him to stand down as premier in 2008, said the UN vote last week served Israeli interests more than Palestinian ones because it boosted hopes for a two-state solution.
The former premier praised the "outstanding expression of courage" shown by the US administration in backing Israel at the UN last week. The United States and Israel were among only nine countries to oppose the Palestinians.
Israel should have thanked the United States, he added.
"I was utterly surprised -- as I can see now were most countries in the world -- that the next morning the Israeli government decided to do the one thing that was certain to offend the policymakers of the United States" by announcing the new settlements, Olmert added.
The Netanyahu government has said it will build 3,000 homes, some in the E1 area of the West Bank linking annexed East Jerusalem to the Maaleh Adumim Jewish settlement.
Olmert said he had agreed to a request by former US president George W. Bush's administration not to build in E1 because the Palestinians would not agree to peace talks.
"Time is running out" for a settlement with the Palestinians, Olmert added as he condemned any move to dismiss the importance of peace efforts in the campaign for the January 22 election.
"It will be an historical mistake that will be disastrous to the life, to the people to the future of the state of Israel," said Olmert, who has until the end of the week to register to stand in the election.
Netanyahu is the overwhelming favorite in the election. But Olmert, who returns to Jerusalem on Tuesday vowed to "use every platform in the state of Israel in whatever position I will have in order to make sure that we will not miss the opportunity."
The former leader of the opposition Kadima party stepped down as prime minister in 2008 after police called for corruption charges.
In July, a court found Olmert guilty of breach of trust but cleared him on two more serious charges related to the alleged receipt of cash-stuffed envelopes and multiple-billing for trips abroad.