So says the New York Daily News:

Former Mayor Rudy Giuliani has decided not to run for governor next year - but will run for U.S. Senate instead, sources told the Daily News.

A source familiar with Giuliani's thinking said the failed presidential candidate has been telling people he plans to run against Democratic Sen. Kirsten Gillibrand in 2010 to fill out the remaining two years of Hillary Clinton's term.

If elected, the source said, he could use that as a stepping stone to run for President in 2012 - rather than run for re-election to the Senate.

A spokesperson for Giuliani downplayed the story.

I believe Rudy may be serious about running for the Senate, but I find it hard to believe that if he were to win he would turn around a few weeks later and throw his hat in the ring for President - which is what he'd have to do.

I also find it somewhat specious, given the way his last go round ended up playing out, that Giuliani's prospects of running the gauntlet in the Republican primary will somehow be better two years from now than they were a year ago. If anything, they might be worse.