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Ehud Olmert’s corruption probe unfolds with cross-examination of key witness

Lawyers representing Ehud Olmert on Thursday cross-examined a key witness in a corruption probe against the Israeli prime minister, hoping to discredit allegations that Olmert illicitly accepted cash-stuffed envelopes from an American businessman to help fund a luxurious lifestyle.

The cross-examination of the businessman, Moshe Talansky, is seen in Israel as perhaps Olmert's last chance of political survival. Talansky's testimony in May seriously damaged Olmert's credibility among Israelis. The resulting outrage prompted Olmert's Kadima Party to set new leadership elections, to be held by Sept. 25.

Olmert's premature departure from office could seriously hamper or delay his government's efforts to conclude a peace deal with the Palestinians and resume full negotiations with the Syrians.

Olmert has consistently denied any wrongdoing. He has said he will resign if he is indicted.

"Today the cracks in the police and state prosecutors allegations will be revealed," said Amir Dan, a public relations consultant Olmert hired privately to present his position concerning the corruption allegations in media interviews.

"The Israeli public will discover that they are trying to take down a serving prime minister based on unfounded charges," Dan told Israel Army Radio.

Olmert is reportedly still considering running in the Kadima primaries, hoping that his lawyers will be able to discredit Talansky, a 75-year-old businessman who lives on New York's Long Island.

Talansky accused Olmert of accepting hundreds of thousands of dollars in cash during his tenure as Jerusalem mayor and as a Cabinet minister before he was elected in 2006. The money went to feed a penchant for expensive cigars, first-class travel and luxury hotels, Talansky charged.

Police suspect the money was meant as bribes - although Talansky insisted he never got anything in return - or illegal campaign financing.

In the latest revelation in the case, police last week accused Olmert of pocketing thousands of dollars by deceiving multiple sources - including organizations for Holocaust survivors - into paying for the same trips abroad. The widening of the investigation was announced as Olmert was questioned for the third time in the corruption probe.

Olmert has called the most recent accusations "distorted," charging the police and state prosecutors with trying to bring him down.

Olmert said he felt insulted because he said he had worked hard for the organizations named in the allegations, which included the Yad Vashem Holocaust memorial and the Nazi watchdog Simon Wiesenthal Center.

Olmert's allies note that he's been written off before only to emerge intact. This is the fifth major corruption case against him and few thought he'd survive the fallout from his much criticized handling of the war in Lebanon which broke out two years ago Saturday.

Legal analyst Moshe Negbi said he doubts attempts to undermine Talansky would help restore Olmert's standing. "It's not necessarily true that throwing mud at Talansky, even if some of it sticks, will clean Olmert," Negbi told Israel Radio.