Olmert probed again on corruption

Olmert's decision could be a chance for opposition leader Netanyahu (left)

Israeli police have questioned Prime Minister Ehud Olmert for a fourth time over allegations of corruption.

The latest stage of the police investigation comes two days after he said he would step down in September to fight the allegations, which he denies.

A US businessman has said he gave Mr Olmert envelopes stuffed with cash before he became prime minister.

Mr Olmert has said he only received legitimate campaign funds from the businessman, Morris Talansky.

He has also denied the latest allegations to emerge, that he sent multiple expenses claims for his overseas trips.

EHUD OLMERT'S POLITICAL LIFE 1993: Begins 10-year stint as mayor of Jerusalem 2005: Leaves right-wing Likud party with former Prime Minister Ariel Sharon to form Kadima 2006: Takes over as leader when Ariel Sharon suffers a stroke 2007: Helps relaunch Israeli-Palestinian peace talks after seven-year hiatus 2008: Announces plans to resign New Israeli leader, same puzzles Ehud Olmert: Corruption allegations Press ponders Olmert resignation

Mr Olmert said on Wednesday that he would not stand in a leadership election for his Kadima party and would hand over the premiership to whoever won.

Israeli analysts are doubtful that the new Kadima leader will be able to form a new coalition, which could mean Mr Olmert remains as caretaker prime minister until a general election.

He has faced growing calls to resign after being questioned about six corruption scandals, although no charges have been filed, and being criticised by a report into the 2006 Lebanon war.

The political uncertainty in Israel has cast a shadow over a faltering US-backed peace process with the Palestinians and indirect talks with Syria.

Succession race

Opinion polls in Israel show Likud leader Benjamin Netanyahu and Kadima's Tzipi Livni running almost neck-and-neck if a national election were held now.

On Thursday, Mr Netanyahu called for snap elections, saying the Kadima-led government had "finished its mission" and was responsible for a "string of failures".

Ms Livni, a favourite to replace Mr Olmert as head of the Kadima Party, said the prime minister's decision had been hard but correct.

Transport Minister Shaul Mofaz, Public Security Minister Avi Dichter and Interior Minister Meir Sheetrit are also seen as potential successors.

In the past, Mr Olmert has said he would only resign if indicted for wrongdoing; analysts say Wednesday's decision means Israel will not have to face that unedifying prospect, and the prime minister's poll ratings are so low he would stand little chance of re-election.