Olmert resists calls to step aside

Israeli Prime Minister Ehud Olmert responded with a business-as-usual approach today to a demand by his defence minister that…

Israeli Prime Minister Ehud Olmert responded with a business-as-usual approach today to a demand by his defence minister that he step aside over corruption allegations.

But his deputy, Foreign Minister Tzipi Livni, said their Kadima party should "take decisions" and start preparing for "any scenario", including an early general election and an internal leadership vote.

Mr Livni, Israel's chief negotiator with the Palestinians, is widely seen as a top candidate to replace Olmert. In her public remarks, Livni did not call for Olmert to step down, but said "values and norms" must be upheld in Israeli politics.

Stepping up the pressure, Defence Minister Ehud Barak told members of his left-leaning Labour faction that if the prime minister failed to act, Labour would force the issue.

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"The prime minister has to make decisions. Factions have to make decisions, and if they don't, we will make the decisions for them," said Mr Barak, whose party is Mr Olmert's largest coalition partner.

Mr Olmert has made clear through aides that he has no intention of stepping down. At a welcoming ceremony for Denmark's prime minister on Thursday, he made no reference to Barak's call to go on leave or quit.

"I intend to discuss with the visiting prime minister ... the international effort to stop Iran's nuclear (programme), the regional peace process, the war against terror and the strengthening of radical Islam in the Middle East and worldwide," Mr Olmert said, hitting his usual talking points.

Mr Olmert plans a three-day visit to Washington next week for talks with US President George W. Bush and a speech to the annual policy conference of a pro-Israel lobbying group.

Mr Barak threatened yesterday to pursue an early election - bringing political turmoil that could derail Israeli-Palestinian peace talks - after a US businessman told an Israeli court he had handed Mr Olmert envelopes with thousands of dollars in cash.

Amid the political uncertainty, Attorney-General Menachem Mazuz convened prosecutors and police officers today to discuss the way forward in the investigation against Olmert.

Mr Mazuz issued a statement after the meeting saying the investigation would be speeded up "in order to complete it as soon as possible". He gave no precise timeframe for a decision on whether to indict the prime minister.

Mr Olmert has ridden out similar storms in the past. He has pledged to resign if charged and denied any wrongdoing in accepting what he has described as above-board election campaign contributions.