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Latest update : 2008-05-30

Following testimony from a US businessman who said the Israeli PM accepted cash in envelopes as campaign donations over a 14-year period, his foreign minister Tzipi Livni said Kadima "should start preparing for any scenario, including elections."

Find out more about the scandal threatening Olmert's premiership by watching our Top Story.


Israel's foreign minister and Kadima party number two challenged Ehud Olmert's party leadership on Thursday, calling for an unprecedented primary amid demands he quit as premier over graft suspicions.
"Kadima should start preparing now for any possible scenario, including elections. I am a big believer in primaries," said Tzipi Livni.
"I believe most of the public should be involved in the election of the leadership. This way we will be able to retrieve the public's support in Kadima," she told reporters in Jerusalem.
At no point, however, did Livni explicitly call for Olmert to step down as party leader or as premier.
Kadima, founded hastily by former prime minister Ariel Sharon before the March 2006 elections, does not have an internal mechanism for ousting a leader or holding party leadership elections.
Israel has been abuzz all day with speculation that a snap election would be held in late 2008 or early 2009. That was set off after a key ally in the government coalition, Defence Minister and Labour party leader Ehud Barak, joined calls for Olmert to step down over allegations he illegally received vast sums of cash from a US financier.
As pressure on Olmert mounted, Attorney General Menahem Mazuz decided after a meeting with the state prosecution on Thursday to speed up the investigation, the justice ministry said.
"We can't ignore recent days' events. The issue is not only legal, it is not only a criminal question," Livni said. "These are not the prime minister's personal issues. These are questions of values and norms we want to apply."
Olmert, whose term ends in late 2010, has said he had no intention of quitting, although an opinion poll on Thursday found that 70 percent of people surveyed thought he should go.
"I am going to continue to exercise my functions," the embattled prime minister said on Wednesday.
"Some people think that each time an investigation is launched, it has to lead to a resignation. But I don't share that opinion -- and I am not going to give up."
However, if Olmert were to be indicted over the latest scandal, he would be legally bound to step aside.
Olmert, 62, has denied any wrongdoing over the allegations that have been simmering since police first questioned him in the affair on May 2. He has, however, acknowledged receiving campaign donations.
But experts say it will be difficult for him to focus on peace talks with the Palestinians and indirect negotiations with Syria while fighting for his own political survival.
Opposition lawmakers have also claimed that the scandal-tainted premier lacks the moral authority to lead peace efforts that could shape the future of the Middle East.
Olmert, who flies to Washington on Monday for a three-day visit and a meeting with US President George W. Bush, has asked Kadima MPs not do anything until his return, the Maariv newspaper reported.
Barak, himself a former premier, said that unless Kadima acts to form a new government, with Labour's support, "we will work to decide on a new agreed early date for elections."
Without the support of Labour's 19 MPs, Olmert's coalition would lose its parliamentary majority in the 120-member Knesset.
Barak dropped the political bombshell a day after Jewish-American financier Morris Talansky testified before a Jerusalem court that he had given Olmert vast amounts of cash stuffed into envelopes.
Talansky said he had given Olmert at least 150,000 dollars in the 14 years before he became prime minister in 2006, some of which might have been used to fund Olmert's taste for luxury goods.
Olmert, who became premier in 2006, faces three more police inquiries into suspected corruption involving potential conflicts of interest, fraudulent property transactions and abuse of power linked to political appointments.

Date created : 2008-05-29