Activate the jquery script on my PHP

Hi everyone!
I have an HTML document that I converted into a wordpress theme. I have a jquery script on my “header.php” that works fine as HTML, but not running properly (actually, not at all!)

On my “header.php” file I have:

<script type="text/javascript" src="Scripts/jquery-1.2.6.min.js"></script>

<script type="text/javascript">

function slideSwitch() {
    var $active = $('#slideshow IMG.active');

    if ( $active.length == 0 ) $active = $('#slideshow IMG:last');

    // use this to pull the images in the order they appear in the markup
    var $next =  $active.next().length ? $active.next()
        : $('#slideshow IMG:first');

    // uncomment the 3 lines below to pull the images in random order

    // var $sibs  = $active.siblings();
    // var rndNum = Math.floor(Math.random() * $sibs.length );
    // var $next  = $( $sibs[ rndNum ] );

    $active.addClass('last-active');

    $next.css({opacity: 0.0})
        .addClass('active')
        .animate({opacity: 1.0}, 200, function() {
            $active.removeClass('active last-active');
        });
}

$(function() {
    setInterval( "slideSwitch()", 7000 );
});

</script>

And on my “index.php” I call upon these images:

<div id="slideshow">
  	<img src="<?php bloginfo('template_directory'); ?>/images/CDjewelCase.jpg" alt="" class="active"/>
  	<img src="<?php bloginfo('template_directory'); ?>/images/scroller.jpg" alt=""  />
  </div><!--end slideshow-->

On my CSS I have:

#slideshow{
	position:relative;
	width:960px;
	height:308px;
	margin-left:auto;
	margin-right:auto;
	top:45px;
}

#slideshow IMG{
	position:absolute;
	top:0;
	left:0;
	z-index:8;
	opacity:0.0;
}

#slideshow IMG.active {
	z-index:10;
	opacity:1.0;
}

#slideshow IMG.last-active {
	z-index:9;
}

Like I said, these works fine on HTML, but not on PHP. Can anyone help me make it work on my theme?

Thank you in advance!
Rafa.