Source: Israel Will Not Challenge Gillibrand

Representative Steve Israel will momentarily announce his decision not to challenge Kirsten Gillibrand for the U.S. Senate seat, said a source close to Israel.
“He is doing it for party unity,” said the source.
Israel, in choosing not to run for a seat he terribly coveted, is apparently yielding to the pressure exerted by the Democratic establishment, and especially Chuck Schumer, which made its opposition to a potentially damaging Democratic primary clear in recent days.
Israel, a four-term congressman, had campaigned vigorously for the Senate seat during the appointment process in which Governor David Paterson chose Gillibrand, a first-term upstate representative with a conservative record.  
UPDATE: Here’s the statement from Israel’s office, saying that President Obama personally called and asked Israel not to run.

Source: Israel Will Not Challenge Gillibrand