Party sources said over the weekend that the chairman, who is lagging behind in the polls, has decided to pull his candidacy after Oron announced he would run in the elections, effectively eliminating Beilin's chances.
Meretz officials welcomed Beilin's announcement, although one of Beilin's would-be successors, Ran Cohen, attacked the outgoing chairman's endorsement of Oron.
"[The Oron endorsement] is an attempt to preserve the same leadership which is responsible for Meretz's failure and its retreat into a niche party," Cohen, who will square off against Oron and Zehava Gal-On in party primaries on March 18, said.
"It is against this failure that I present my candidacy with the goal of returning Meretz to public relevance and to turn it into an open, widened party," Cohen said.
"Beilin is a person with skills and positive attributes to his credit who displayed responsibility in his decision not to run for leadership of Meretz," Gal-On said. "As a result, Meretz can now change direction and return to being a bold, relevant, and influential party."
Oron said that he "greatly values, respects, and hails Beilin's move and places importance in his support. His announcement placed principle before political battles, and is thus worthy of much appreciation."
Beilin left the Labor Party in 2003 and joined Meretz, then led by Yossi Sarid. After Sarid's resignation in 2005, Beilin ran against MK Ran Cohen and won the party chairmanship.
Beilin capitalized on the 2003 Geneva peace initiative, in which he was a key player, but failed to consolidate his leadership within the party. He has often been criticized by fellow party members for making decisions without proper consultation.
In the 2006 elections, under Beilin's leadership, Meretz won just five seats in the Knesset, one of the worst results the party has achieved since its launch in the 1980s.
Beilin told a news conference Sunday that he telephoned Oron to inform him of his decision.
"I want to say to you that in no way did I come to Meretz with the intention of becoming party head," Beilin said. "The defeat in the 2003 elections created a new situation in which the chairman, Yossi Sarid, resigned. If Oron would have declared his candidacy, there's no doubt I would have supported it. He decided not to run, and I won the post."
As party chairman, Beilin inherited what he views as a faction in disarray and managed to overcome most of the problems which plagued Meretz.
"I took over a party that was in an uneasy state," Beilin said. "A party that went from 12 Knesset seats to six in a span of seven years; a party that was in the midst of serious financial difficulties following the 2003 municipal elections. This was a situation that bordered on bankruptcy. I'm pleased that we succeeded in overcoming most of the problems that we were faced with."
Beilin noted in his remarks that the central dilemma which confronted Meretz in recent years is the question of its relevance.
"Despite its impressive ideological achievements in areas which it has been in the lead all these years - human rights, peace, and religion and state - the fact that many people are speaking 'Meretzish' did not translate into great success in elections," Beilin said. "Our problem in the 2003 elections was the election of Amir Peretz as chairman of the Labor Party. Voting for Meretz was more Meretz than Meretz. The way in which we managed things brought us five parliament seats - this is a drop but not as bad a drop as the doomsayers predicted."
"Oron's candidacy had me contemplating," Beilin said. "The announcement came in the middle of a re-election campaign and it surprised me. I have a long-standing principle - I don't run against long-time political comrades.