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JERUSALEM: Israeli Prime Minister Ehud Olmert on Thursday denied allegations of bribery but said he would resign if charged in a case that threatens to shake up the nation's political landscape.
Details of the allegations against the 62-year-old premier were unveiled after the justice ministry lifted a gag-order in the case, which has been the subject of a swirl of rumours and intense media speculation for days.
The scandal has cast a cloud over Olmert's political future just as Israel marks its 60th birthday and with peace talks with the Palestinians making only halting progress.
The ministry said a probe has been launched into suspicions that Olmert unlawfully received payments from a foreign businessman based in Israel during his time as mayor of Jerusalem and as industry minister.
"I have never received any bribes," Olmert said in a declaration from his Jerusalem residence.
But he added: "If the judiciary decides to charge me, I will resign."
Olmert admitted he had received "financial contributions" for various election campaigns from Jewish American businessman Morris Talansky, 75, but insisted they were not illegal.
The announcement followed the lifting of a comprehensive blackout imposed by the judiciary in the case, the fifth such investigation into the dealings of Olmert before he became prime minister in 2006.
Asked about the allegations - which surfaced shortly before US President George W. Bush is due in the region next week - the White House said Olmert's legal woes were "a matter for the Israeli judicial system."
Asked whether the situation would affect the president's trip, spokesman Gordon Johndroe said there were "no changes to the schedule," that Bush will go to Israel and "will meet with Olmert."
Bush is pushing for an Israeli-Palestinian peace deal to be reached before he leaves office in January 2009.
Olmert has insisted he will continue his duties as premier, but in a rare step he cancelled all interviews he traditionally grants local media ahead of Israel's anniversary celebrations.
Anti-fraud investigators had questioned Olmert for an hour on Friday at his official residence, while his former office manager, Shula Zaken, has been questioned four times.
He has hit back at what he called a "hysterical" campaign against him, but his coalition partners have been getting edgy.
Defence Minister Ehud Barak warned on Tuesday that his Labour party "must take into account the fact that in our current political situation the next elections could be called unexpectedly, and we have to be prepared."
Olmert took office after his predecessor Ariel Sharon collapsed into a coma in January 2006 and then led his centrist Kadima party to election victory the following March.
He has so far shown himself to be the ultimate political survivor - weathering a string of corruption scandals, massive unpopularity, accusations of failings in the 2006 war against Hezbollah, and a cancer scare.
But he is also facing a shrinking coalition, after three MPs announced their defection to a new party formed by Russian Israeli billionaire Arkady Gaydamak, leaving Olmert with the backing of just 64 of the 120 members of parliament.
When a premier resigns it is up to the president, currently Shimon Peres, to pick a successor who can try to form a government. Failing that, early elections must be held.
Foreign Minister Tzipi Livni, a member of Kadima, has been tipped as the most likely candidate to succeed him if he goes.
The premier is already the subject of three police inquiries into suspected corruption involving potential conflicts of interest, fraudulent property transactions and abuse of power in connection with political appointments. Another case against him was dismissed.
The Ynet news website said Olmert is believed to have allegedly received the payments over a lengthy period of time, both directly and indirectly, the site said, adding: "The funds were said to amount to a small fortune."
Former Israeli president Moshe Katsav became the country's most senior official to be forced to step down last year over wrongdoing after he was found guilty of several charges of sexual harassment. - AFP/de
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