Ehud Olmert's political opponents demanded his resignation Friday, saying new allegations that the Israeli prime minister illegally accepted hundreds of thousands of dollars from a US citizen render him unfit for the country's top job.
Reading a statement in a nationally televised speech late Thursday, Olmert said he would resign only if police formally indicted him. He denied any wrongdoing in the case, which carries the potential to force him from office and derail fragile peace talks with the Palestinians.
"I am looking all of you in the eye, and I say I never took bribes, I never took a penny for myself," he said.
But some Israeli lawmakers critical of Olmert said the new police investigation - the fifth opened into the prime minister's activities since he took office in 2006 - was reason enough for him to leave office.
Olmert's legal troubles are diverting his attention from running the country, and "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," the Knesset Member said.
Eldad's call was echoed by other politicians from opposition parties and by a small number of lawmakers who belong to Olmert's governing coalition. Shelly Yacimovich of the Labor Party, a junior partner in the government, told Israel Radio that Labor "cannot remain in the same coalition with a prime minister tarnished by such deep corruption."
Labor's departure would bring Olmert's government down and likely lead to elections, currently scheduled only for 2010. But that possibility still appears remote. Neither Labor nor any of Olmert's other coalition partners have indicated they will bolt over the new allegations.
According to police suspicions, Olmert accepted hundreds of thousands of dollars in illegal contributions from American Jewish businessman Morris "Moshe" Talansky before becoming prime minister. In his speech Thursday, Olmert denied the charges. He said a lawyer handled his finances and insisted everything was legal.
Yoel Hasson, a lawmaker from Olmert's party, said, "I certainly accept his version of events. You don't topple and replace governments or prime ministers because of allegations and investigations," Hasson told Israel Radio.
Olmert said he will not fight to stay in office if he is formally 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.
'Probe matter for the Israeli judicial system'
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."
The patrons of one cafe in downtown Jerusalem on Friday morning were unanimous: Olmert should step down now. "I'll tell you the truth - when I see the newspapers and listen to the radio, it's not good, not good," said Avraham Fixler, a pub manager. "He should be a gentleman and go home."
"There are too many issues of corruption around him. It sounds like he doesn't know how to behave correctly or run this state correctly," said another patron, Yishai Menuchin.
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.
Talansky told Channel Two TV that 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.
"They (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."
Talansky's attorney, Jack Chen, declined a request Friday to interview his client and would not comment on the case. The charges threaten to further weaken Olmert's hold on power and potentially torpedo formal peace talks with the Palestinians launched last November at a US-hosted Mideast peace conference at Annapolis, Maryland.
The White House said the case would not alter President George W. Bush's planned visit to Israel next week, calling the investigation "a matter for the Israeli judicial system."
"The president looks forward to traveling to the Middle East next week to continue to encourage the Israelis and Palestinians to work together for a two-state solution," said Gordon Johndroe, the president's national security adviser.
Olmert is a suspect in several corruption affairs involving real estate deals and questionable political appointments. He has been questioned several times by police but has never been convicted.
Some of Olmert's close political allies have also had legal troubles. His finance minister had to step down under embezzlement suspicions, and another - now the country's vice premier - was convicted of sexual misconduct for forcibly kissing a female soldier.
Moshe Negbi, an Israeli legal expert, told Israel Radio that Olmert could get seven years in jail if convicted of taking bribes.