With President Bush arriving, Israeli Prime Minister Ehud Olmert in deep trouble with law

JERUSALEM: As U.S. President George W. Bush arrives in Israel to help celebrate the Jewish state's 60th birthday, he will find his host, Ehud Olmert, in deep trouble.

A widening investigation into the Israeli leader's financial dealings is turning up evidence that those close to the probe say is giving Olmert good reason to worry.

Police say they have enough material for an indictment. The two main witnesses — a despondent attorney who was seen wandering along Israel's busiest highway on the day he was questioned and an American rabbi who has been accused of sending thugs to collect debts — are corroborating each other's testimony about delivering payments to Olmert, officials told The Associated Press.

The case — which revolves around suspicions that Olmert received hundreds of thousands of dollars in illegal contributions — is more substantive than any of the four other high-profile probes that have plagued his stormy two-year tenure as prime minister, said several officials close to him. The officials spoke on condition of anonymity because the investigation is ongoing.

Taken together, the corruption cases pose a serious threat to Olmert's political survival — and to the U.S.-backed attempts to broker an Israeli-Palestinian peace deal before Bush leaves office next January.

"What I worry about is the accumulation of these kinds of investigations," said Israeli Cabinet Minister Zeev Boim, a boyhood friend and confidant of the prime minister. "How many investigations can one person stand?"

Boim said he met with Olmert on Tuesday, and that the Israeli leader tried to project a "business-as-usual" demeanor. His impression, however, was that Olmert, "in his stomach, from the bottom of his heart, is feeling ... something of a crusade against him."

Olmert is just the latest Israeli leader to come under police investigation. Most recently, Moshe Katsav was forced to resign the presidency last year under suspicion of rape and sexual harassment of female staffers. A son of Olmert's predecessor, Ariel Sharon, is serving a short jail term for campaign finance violations. The two prime ministers who preceded Olmert — Benjamin Netanyahu and Ehud Barak — were also investigated but were never charged.

At the center of the current investigation is Morris Talansky, a 75-year-old American rabbi turned financier who police suspect delivered between $300,000 (€195,000) and $500,000 (€325,000) to Olmert before he became prime minister — some of it, according to police, in cash-stuffed envelopes given directly to Olmert or via middlemen.

Olmert has denied any wrongdoing and said in a nationally televised address last week that he would resign if indicted. "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.

Police on Monday and Tuesday raided the offices of the Jerusalem City Hall, where Olmert was mayor for a decade, and the Israeli trade ministry, which Olmert headed for three years before becoming prime minister in 2006.

Also Monday, police took testimony from American businessmen Daniel Abraham and Sheldon Adelson. Police officials, speaking on condition of anonymity because the investigation is in progress, said they gave their versions of the events.

Police officials said they are attempting to prove that Olmert accepted bribes, not just the lesser offense of receiving illegal campaign funds.

An Israeli newspaper reported Tuesday that as mayor Olmert helped rezone land for Talansky's associates and promoted their bids for government projects.

The report in the Yediot Ahronot daily — which gave no further details — was the first indication of what Olmert might have given in return for the alleged payments.

Talansky has insisted that all of his actions on behalf of Olmert were legal. On Tuesday, Talansky's lawyer, Jacques Chen, dismissed the suspicions raised in the Yediot Ahronot report.

"He never asked (Olmert) for anything and doesn't know anything about it," Chen told AP. Talansky, who was questioned by police again on Monday, has agreed to remain in the country until May 21 and to "return whenever necessary" to testify in the case, Chen said.

Much of the case will hinge on testimony from Talansky and Olmert's one-time law partner Uri Messer, who Olmert said handled the contributions in question. Police say Talansky and Messer have given similar accounts about the alleged cash transfers. However, bizarre revelations have raised questions about their credibility.

On the day last week he was hauled in by police for questioning, Messer was photographed mysteriously wandering along the shoulder of a Tel Aviv highway in what local media and police said was a sign of distress.

Talansky, meanwhile, has a long history of peculiar legal battles in the U.S., and despite being an ordained rabbi, has been accused of sending "thugs" to collect debts.

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