Olmert dismisses police probe rumours

Israeli prime minister Ehud Olmert said today he would conduct government business as usual despite rumours about the nature …

Israeli prime minister Ehud Olmert said today he would conduct government business as usual despite rumours about the nature of a new police investigation against him.

Fresh questions about Olmert's political future emerged as US Secretary of State Condoleezza Rice visited the region to try to move Israeli-Palestinian peace talks towards a deal she said Washington still hoped to seal by the end of the year.

Israeli media quoted unidentified legal sources and unnamed political officials as saying the suspicions against Olmert were particularly serious and could force his resignation, a move likely to delay peace efforts he has pursued at US behest.

"I answered all questions I was asked. I cooperated with the investigators," Olmert said in his first public remarks about his sudden questioning on Friday by police. "I have an agenda as Israel's prime minister. I intend to carry on with this agenda."

Olmert, 62, is already under investigation in a series of corruption cases. He has denied any wrongdoing in those probes.

Police have not disclosed why they questioned Olmert on Friday in a new investigation.

Olmert's office said in a statement on Friday he was asked about funds raised by an unnamed American for municipal and party elections in 1999 and 2002. It did not say whether police suspect Olmert of obtaining or using the money illegally.

Olmert successfully ran for re-election as Jerusalem mayor in 1999. In 2002, he ran against then Prime Minister Ariel Sharon for the leadership of the right-wing Likud Party, but lost.

Olmert's strongest rival in his centrist Kadima party, Foreign Minister Tzipi Livni, called at a news conference with Rice - who declined to comment on the investigation - for a swift probe to "remove the existing uncertainty".

Addressing his cabinet, Olmert said "a wave of rumours has swept across the country" about the strength of the police suspicions.

Describing the rumours as "malicious and vicious", Olmert said: "I promise that when things are made clear by the proper authorities, they will be presented in the right proportion and context, and this will put an end to the rumours."

After Olmert made the comments, his office announced he had cancelled interviews he was to have recorded this week with Israeli radio stations to mark Israel's 60th anniversary. It said the decision was prompted by a court gag order in the case.

Olmert is already under criminal investigation over suspicions he dispensed favours in return for a discount on the 2004 purchase of a Jerusalem home. He is also being investigated over allegations that as trade minister in 2003, he appointed allies to a state business authority.