Olmert questioned again on 'funds from businessman'

The Israeli Prime Minister, Ehud Olmert, was questioned for the second time yesterday at his official residence in Jerusalem by police investigating suspicions over funds he is said to have received in the past from an American businessman.

At the same time his lawyers failed in court to delay for two weeks a deposition the businessman, Morris Talansky, will make as part of the police inquiry into possible corruption.

Instead, the Jerusalem District Court ruled that Mr Talansky, who is suspected of channelling funds to Mr Olmert during his time as mayor of Jerusalem and as industry minister, would begin testifying on Tuesday instead of tomorrow as originally intended.

The court also ruled that lawyers representing the Prime Minister and his former bureau chief Shula Zaken could cross-examine Mr Talansky when he makes his deposition.

Police declined to confirm media speculation that the main subject of yesterday's hour-long questioning was a statement made to police on Thursday by Mr Olmert's former long-term associate Uri Messer about funds that may have been transmitted by Mr Talansky.

Israeli media also suggested that police had been anxious to interrogate Mr Olmert ahead of Mr Talansky's deposition to "lock him" into his version of events before he sees material accumulated by police in earlier questioning of Mr Talansky and knows what the American has said in his deposition, which will be given in open court.

The police are obliged to give Mr Olmert's lawyers the material before the deposition so that they can cross-examine the witness.

The investigation, which some commentators suggest may be the most serious Mr Olmert has faced, has prompted renewed speculation about how long he will stay in office, with politicians in private and the media in public debating the possible succession. Mr Olmert, while recognising the adverse effect of the headlines, has reportedly told colleagues he does not expected to be indicted. He has already said that if indicted, he will resign.