Israeli prime minister accused of receiving illegal funds

JERUSALEM -- Israeli prime minister Ehud Olmert, responding to fresh accusations that he illegally accepted hundreds of thousands of dollars from a U.S. citizen, on Thursday said he will step down if he is indicted.

Olmert said he never took illegal campaign contributions, responding to a corruption case that also has the potential to derail delicate peace talks with the Palestinians.

Olmert made his statement in a nationally televised speech from his official residence late Thursday after a gag order was lifted from the case. According to police suspicions, Olmert accepted hundreds of thousands of dollars in illegal contributions from American Jewish businessman Morris "Moshe" Talansky.

Army Radio said suspicions concern money Olmert allegedly received from 1999 to 2003, when he was mayor of Jerusalem and later minister of industry and trade.

In his statement, Olmert said a lawyer handled his finances, and everything was legal. "I am looking at all of you in the eye, and I say I never took bribes, I never took a penny for myself," he said.

He said he would not fight to stay in office if he is charged.

"I was elected by you, citizens of Israel, to be the prime minister and I don't intend to shirk this responsibility. At the same time, and even though the law does not require me to do this, I will resign from my job if the attorney general decides to issue an indictment against me," he said.

Olmert said Talansky had made contributions to him for two mayoral campaigns for Jerusalem, one campaign for chairman of the Likud Party and another to cover campaign debt retroactively.

He said he has served the Israeli public in different roles for more than 30 years, and, like any prime minister, is now dealing "with important and sensitive issues which concern our existence as a people and as a state."

"I am sorry about the rough times that the public is going through, as are those who are close to me. I hope that this storm, too, shall pass with the same speed by which it was ignited," he said.

Olmert's statement and the court's decision to lift the gag order on the case that first came to light about a week ago came as Israelis celebrated their nation's 60th anniversary.

Israel's Channel Ten TV reported Thursday that Talansky was suspected of being a middleman for illegal campaign contributions, and that he readily told Israeli interrogators everything he knew about the case.

Channel Two TV reported that Olmert received hundreds of thousands of dollars from Talansky in cash in a series of meetings, while Olmert was Jerusalem mayor.

Talansky told Channel Two he was in Israel visiting family for the Passover holiday when he was called in for questioning. He said he was "baffled" by the case and that he did nothing wrong.

"[The police] knocked on my door at six in the morning and it was the national police and they asked me to come with them and I obliged ... and it was very surprising. When they asked me details, I said whatever I know," Talansky said.

Referring to his relationship with Olmert, he said, "We are very, very friendly and I used to meet him all the time at dinners in New York."

Even before the gag order was loosened, Olmert's opponents were calling on him to resign. Olmert is the target of several other investigations, but he has never been charged or convicted. He denies any wrongdoing.

If Olmert is indicted, he would probably have to resign, though a decision on whether to indict is likely to take at least several weeks, if not months. Israeli law restricts how much politicians can get from donors.

The latest case is the fifth high-profile probe involving the Israeli leader whose popularity has badly suffered because of the repeated charges of corruption.

Though Olmert's office has predicted he will weather the latest storm, the case threatens to further weaken his hold on power and potentially torpedo formal peace talks with the Palestinians launched last November at a U.S.-hosted Mideast peace conference at Annapolis, Maryland.