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Israeli police raid city offices in Olmert fraud probe

  • Story Highlights
  • Report: American businessman questioned in Olmert fraud probe
  • Police seize documents in raid of Jerusalem municipal offices
  • Probe of Ehud Olmert covers his time as Jerusalem mayor, trade minister
  • Olmert has denied that he illegally accepted any money
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JERUSALEM (CNN) -- Authorities raided municipal offices in Jerusalem on Monday as part of a fraud investigation involving Prime Minister Ehud Olmert, police said.

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Israeli Prime Minister Ehud Olmert's rivals have called for his resignation amid allegations he accepted bribes.

Investigators did not disclose the substance of documents that were seized in the raid, which occurred the same day that police questioned American businessman Morris Talansky about contributions he made to Olmert's campaigns, according to the Israeli daily, Haaretz.

Police are investigating whether Olmert illegally accepted hundreds of thousands of dollars from Talansky while he was mayor of Jerusalem and the nation's Minister of Industry Trade and Labor.

Olmert, who was questioned briefly in the probe on Friday, has publicly denied taking any bribes. In remarks to reporters last week, he said he would resign if he is indicted. Video Watch Olmert assert his innocence »

Olmert told reporters that Talansky donated money to his campaign and helped him raise funds, a claim that Talansky supported in an interview on Israel's Channel 10.

Like Olmert, Talansky denied the bribery allegations. As of Monday, neither had been charged with a crime.

"I never thought in any way that the money that I gave him ... was in any way illegal or wrong," Talansky told Israel's Channel 10. "He was not the only one that came to America to ask for money for their election campaign. And so I thought it was legal." Video Watch Talansky deny bribe allegations »

During the interview, Talansky denied having any financial interests in Israel except for an apartment in the country.

Last week, authorities indicated that they wished to speak with Talansky as soon as possible.

"One of the central witnesses in this case is a foreign resident and a citizen who came to Israel for a visit over the Passover holidays and his testimony was taken during this time," authorities said Thursday. "The witness involved was brought in for questioning after his alleged involvement in transferring the money."

Shula Zaken, Olmert's right-hand woman for 30 years, was suspended last year as head of the prime minister's office amid allegations that she appointed cronies to Israel's Tax Authority. The prosecution is expected to decide soon whether to file charges against her, according to the Israel daily newspaper Haaretz.

Zaken has refused to cooperate in the current investigation into Olmert, and has been placed under house arrest, the newspaper reported.

According to Haaretz, this is the fifth investigation into Olmert since he became prime minister two years ago, calling it "the latest in a longer string of probes to dog him during his three decades in politics."

The newspaper says that Olmert has never been convicted of wrongdoing.

He is still under investigation for the purchase of a house in an upscale Jerusalem neighborhood that he allegedly bought while he was Jerusalem's mayor for below-market value in return for favors.

Israeli officials also are investigating an alleged $10 million business deal that he participated in while he was labor minister that involved his former business partner.

A yearlong investigation into Olmert's role in the privatization of Israel's second-largest bank wrapped up in November with no charges filed against the prime minister.

Olmert supporters maintain the investigations are a political move by opponents who want him out of office.

Olmert has been dogged by dismal approval ratings since Israel's 2006 war with Hezbollah militants in Lebanon, which some analysts say failed to weaken the group either militarily or politically.

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He is also under intense pressure from the United States, a key Israeli ally, to forge a peace agreement with Palestinians by the end of the year. A weekend visit by U.S. Secretary of State Condoleezza Rice was largely overshadowed by media reports of the current investigation.

News of the raids came one day before President Bush was set to arrive in Israel to celebrate the Jewish state's 60th anniversary.

All About Ehud OlmertHaaretz Daily Newspaper Ltd.

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