By Steven Scheer and Maayan Lubell
JERUSALEM 
(Reuters) - Bank of Israel
Lagarde, the French Finance Minister, told her Saudi Arabian counterpart earlier in the day that tackling sovereign debt troubles would be a priority of the IMF if she led the Washington-based rescue lender.
Fischer, also competing with Mexican central bank chief Agustin Carstens, had said the IMF post was one of the best jobs in the international financial system but was noncommittal on a bid until Saturday.
"There arose an extraordinary and unplanned opportunity -- perhaps one that will never happen again -- to compete for the head of the IMF, which after much deliberation I decided I wish to follow through on," Fischer said in a statement.
Israeli Finance Minister Yuval Steinitz, Israel
The job has been vacated by Frenchman Dominique Strauss-Kahn, who resigned after his arrest on May 14 on charges of attempting to rape a New York
Fischer, 67, would be a significant contender to Lagarde. But the IMF would have to change its rules that no one should be appointed to the post over the age of 65 and that no one should hold the post beyond the age of 70.
Fischer, a former deputy managing director of the IMF and ex-vice chairman of Citigroup, was born in what is now Zambia
"Because of my unique experience ... I believe I can contribute to the IMF, the central entity of the global economy, and contribute to the global economy after the crisis," said Fischer, who previously had said the head of the IMF did not need to be European.
Economist Nouriel Roubini said Fischer had the qualifications to run the IMF but would not be able to knock Lagarde off course.
"Stan Fischer would make an excellent IMF managing director. But, at this late stage, he does not have enough support to succeed," Roubini, co-founder of research firm Roubini Global Economics, said in an email.
Mohamed El-Erian, co-chief investment officer at the world's largest bond fund company PIMCO, said Fischer would be a popular choice within the Fund, having served as its number two.
"He is extremely well liked by the staff of the IMF, well known and genuinely respected by the member countries of the institution," El-Erian told Reuters.
LAGARDE SEEKS SAUDI SUPPORT
Lagarde was in Saudi Arabia
"There are specific issues to deal with and clearly some of the sovereign debt crisis issues are one of the priorities at the moment," Lagarde told Reuters on the sidelines of a meeting with Saudi Arabian Finance Minister Ibrahim Alassaf in Jeddah.
"I will certainly look at one of the purposes of the fund which is to restore stability."
Lagarde is backed by the European Union and a handful of smaller countries from Georgia to Mauritius Paris is hopeful that Washington and Beijing
Fischer, though, is popular in the United States
Brazil, Latin America's biggest economy, is leaning towards supporting Lagarde but has not yet made up its mind, officials said on Friday.
A Reuters poll of economists from all over the world, published in May, found 32 of 56 saw Lagarde, as the favourite, although Fischer won the most votes as "best suited" for the job.
Fischer, who just started his second year of a second five-year term as Israel 's central bank chief, has been widely credited with helping Israel
One potential pitfall for Lagarde is a legal investigation into her role in a 2008 arbitration payout to a French businessman.
A top French court on Friday put off until July 8 its decision on whether to open a formal inquiry into allegations by opposition left-wing deputies that she abused her authority in approving a 285 million-euro payout to a businessman friend of President Nicolas Sarkozy.
(Additional reporting by Tova Cohen in Tel Aviv and Jennifer Ablan in New York
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