Olmert coalition ally demands Israeli PM step aside
JERUSALEM (Reuters) - Israeli Prime Minister Ehud Olmert'smain coalition partner demanded on Wednesday he leave officeover corruption allegations, dealing another blow to theunpopular leader in turmoil threatening to derail peace talks.
Defence Minister Ehud Barak issued the call -- and raisedthe prospect of an early election -- a day after a U.S.businessman told an Israeli court how he had handed Olmertenvelopes stuffed with thousands of dollars in cash.
"I do not think the prime minister can simultaneously runthe government and deal with his own personal affair," saidBarak, a former prime minister whose Labour party is Olmert'sbiggest partner in a fragile coalition government.
"Therefore, out of a sense of what is good for the countryand in accordance with the proper norms, I think the primeminister must detach himself from the day-to-day running of thegovernment," Barak told a news conference.
Olmert's office declined comment. Israel Radio said Olmert,who is negotiating peace with the Palestinians and pursuingindirect talks with Syria, held a closed meeting withconfidants and told them he had no intention of heeding Barak'scall.
Olmert has ridden out similar storms since taking office inearly 2006 and Barak was less than clear on what steps he mighttake, and when.
Barak also stopped short of action that would immediatelybring down the government and trigger an election that couldbackfire on him. Polls suggest the right-wing Likud underBenjamin Netanyahu would handily defeat Labour.
Barak spelled out Olmert's options as "suspension, vacationor resignation or declaring himself incapacitated". He added:"We will not be the ones to determine this."
Commentators noted Barak took no action on demands he madelast year for Olmert to go after the costly 2006 Lebanon war.
"We've seen this movie before," political analyst RavidDrucker said on Channel 10 television after the newsconference. The left-wing Meretz party said Barak's latestcomments were not a real ultimatum and were just "hot air".
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Barak put the onus on Olmert's centrist Kadima party toseek a new leader to replace him. Olmert has denied anywrongdoing in the corruption case -- saying the money waslegitimate campaign funding -- but has pledged to resign ifindicted.
"If Kadima does not act and a government is not formedduring this current session of parliament that is to ourliking, we will act towards setting an agreed and early datefor elections," Barak said, urging the party to move "soon".
The absence of a deadline gave Barak leeway to allow theongoing criminal investigation to run its course and possiblyend in an indictment which Olmert said would make him quit.
A parliamentary election is not due until 2010. A defectionby Labour would almost certainly force an early ballot anddisrupt a Middle East peace process that Barak supports.
Netanyahu is deeply sceptical of the peace talks with thePalestinians, which Washington hopes can achieve a deal beforePresident George W. Bush leaves office in January, as well ason recently disclosed indirect negotiations with Syria.
Palestinian President Mahmoud Abbas believes the crisis inIsrael will hurt peace talks, his spokesman said.
Should Olmert, 62, step aside temporarily while prosecutorspursue the corruption case against him, Foreign Minister TzipiLivni, as his deputy in Kadima and the cabinet, would almostcertainly take over, for an interim period of 100 days.
Livni is the main negotiator with the Palestinians.
U.S. businessman Morris Talansky testified on Tuesday thathe gave Olmert $150,000 (75,723 pounds) in cash-stuffedenvelopes, including personal loans that were never repaid,over a 15-year period before the veteran politician becameIsrael's leader.
"If what was heard yesterday is true, the prime ministercannot serve as prime minister," said Kadima legislator OtnielSchneller. "But the country cannot be consigned to the whims ofthe public mood."
Olmert, whose defence attorneys will cross-examine Talanskyin July, has acknowledged receiving money from the NewYork-based businessman but said the funds were legal electioncampaign contributions.
(Editing by Alastair Macdonald and Tim Pearce)