Calls mount for Olmert's resignation as Israeli prime minister

By: Amy Teibel, THE ASSOCIATED PRESS

JERUSALEM - Calls are mounting for Prime Minister Ehud Olmert's resignation as police probe allegations that he accepted hundreds of thousands of campaign dollars in cash-stuffed envelopes from a U.S. citizen.

The investigation into Olmert's fiscal conduct is the fifth in two years and threatens to force him from office. It also could derail troubled peace talks with the Palestinians.

After a week-old gag order on the case was partially lifted Thursday, police disclosed that they suspect Olmert of illicitly collecting cash for campaigns over at least six years, when he was mayor of Jerusalem and minister of trade in former prime minister Ariel Sharon's government.

American Jewish businessman Morris (Moshe) Talansky is suspected of involvement in passing money to Olmert directly or through his associates, police say.

A police official says investigators are examining where the illegal contributions went, although it appears the money "disappeared" in the direction of his political party at the time, Likud.

The official spoke on condition of anonymity because the investigation is ongoing.

A Jerusalem court on Friday agreed to hear preliminary testimony from Talansky at an open hearing. The date was not set. State prosecutor Moshe Lador said Talansky expressed concern to police that Olmert would send someone to harm him, Israeli media reported.

Olmert has denied any wrongdoing and said he would only resign if indicted. But political opponents and Israelis said the latest suspicions of criminal misconduct were diverting Olmert's attention from running the country.

"A state like Israel, with an existential threat, needs a full-time prime minister," said Arieh Eldad of the hardline National Union party. "We need a much better leader at this time, and Israel should go to general elections in order to replace him with a better government."

Elections do not seem imminent because his coalition hasn't indicated they want to move up the vote, scheduled for late 2010. Polls suggest that neither his Kadima party nor his coalition partners would benefit from early balloting.

Any indictment would likely take months to hand down, so Olmert's resignation does not appear to be immediately in the offing.

Olmert might have to keep rivals within his own party at bay, however, to avoid being ousted as head of Israel's largest political party.