Page last updated at 11:08 GMT, Tuesday, 22 July 2008 12:08 UK

Final quizzing of Olmert witness

Morris Talansky in a Jerusalem court (22/07/08) - AP
Mr Olmert's lawyers say they have discredited Mr Talansky's testimony

The cross examination of a key witness in the corruption inquiry involving the Israeli PM has entered its final day.

Lawyers for Ehud Olmert say they have discredited the evidence of Morris Talansky after, revealing apparent inconsistencies in his story.

Mr Talansky, a US businessman, has said cash he gave to Mr Olmert in envelopes in 2006 may have been used to buy luxury items.

Mr Olmert denies all wrongdoing, but says he will resign if he is charged.

The scandal, one of six corruption investigations Mr Olmert has faced during his time in office, has sparked widespread calls for his resignation.

His Kadima party has agreed to hold leadership elections in September as part of a deal to avert a threat by Labour leader Ehud Barak to pull out of the ruling coalition.

A number of apparent inconsistencies in Mr Talansky's story have emerged as Mr Olmert's lawyers have cross-examined him over the past five days.

Mr Olmert's lawyer, Eli Zohar, told Israeli newspaper Yediot Ahranot the process had turned his initial statement to Israeli prosecutors in May into "a joke".

Mr Talansky, 75, has said on several occasions that he did not remember details , but maintains that his overall story is accurate.

Speaking to investigators in May, Mr Talansky testified that he gave hundreds of thousands of dollars in envelopes full of cash to Mr Olmert, but said he did not seek or receive any favours in return.

Israeli Prime Minister Ehud Olmert

Mr Talansky has said some of the money was used for expensive personal items, and funds intended as loans were never repaid.

Mr Olmert has said the funds were used legally for election campaigns.

Earlier this month, police said they were also investigating whether Mr Olmert had committed fraud by seeking "duplicate funding for his trips abroad from public bodies".

The Haaretz newspaper quoted sources familiar with the investigation as saying the case would "probably result in am indictment".

Mr Olmert has not been charged with any offences.

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