Police raid trade ministry in Olmert probe

Israeli Prime Minister Ehud Olmert, center, and lawmakers Lia Shemtov, left, and Gideon Saar, right, attend a committee meeting at the Knesset, Israel's parliament, in Jerusalem, Monday May 12, 2008. According to a new poll, six out of 10 Israelis think Prime Minister Ehud Olmert cannot promote peacemaking with the Palestinians because of the latest police investigation into his conduct. The same number think Olmert should resign. (AP Photo/Tara Todras-Whitehill)

JERUSALEM—Police raided the Ministry of Industry and Trade Tuesday, seizing documents in a widening corruption probe of Prime Minister Ehud Olmert.

Investigators from the National Fraud Unit raided the offices "in connection with the Olmert investigation," police spokesman Micky Rosenfeld said. Olmert headed up the ministry from 2003 to 2006.

The investigation, the fifth into Olmert's conduct since he became prime minister two years ago, has raised doubts about his ability to conclude a peace deal with the Palestinians and provoked speculation about his ability to remain in office. Olmert has said he will resign if indicted.

On Monday, police also raided City Hall, confiscating documents related to Olmert's tenure as Jerusalem mayor from 1993 to 2003 and his subsequent years as Israel's minister of industry and trade.

Olmert, who has denied any wrongdoing, is suspected of illicitly receiving hundreds of thousands of dollars from Jewish-American businessman Morris Talansky.

Talansky has insisted that all of his actions on behalf of Olmert were legal.

An Israeli newspaper reported Tuesday that Olmert helped to have land rezoned for associates of Talansky, as well as promoting their bids for government projects.

The report in Yediot Ahronot -- which gave no further details -- was the first indication of what Olmert might have given in return for the cash he allegedly received.

On Tuesday, Talansky's lawyer, Jacques Chen, dismissed the suspicions raised in the report, telling The Associated Press he "has no connection to this."

Police would not comment on the report.

The probe has cast a pall over Israel's 60th anniversary celebrations and embarrassed the prime minister before President Bush's second visit to Israel in just four months.

Bush is due to arrive in Israel on Wednesday for a three-day visit marking Israel's anniversary. Ahead of the visit, he told Israeli media that his relations with Olmert were "excellent" and called the Israeli leader an "honest guy."

But he also said negotiations with the Palestinians do not hinge on Olmert and identified Israel's foreign and defense ministers as possible replacements.

Allegations of corruption have clung to Olmert throughout his three-decade political career, but he has never been convicted. Since becoming prime minister in 2006, he has been a suspect in the ongoing investigations of several corruption affairs involving real estate deals and questionable political appointments.