By Joseph Nasr
JERUSALEM (Reuters) - Israeli Prime Minister Ehud Olmertwas questioned by police for an hour on Friday, the second timethis month that investigators have quizzed him over allegationshe took bribes from an American businessman.
Investigators from the National Fraud Unit turned up earlyfor a previously arranged appointment at Olmert's officialresidence in Jerusalem. "They questioned him for about anhour," police spokesman Micky Rosenfeld said.
The scandal, which police and judicial sources say involveshundreds of thousands of dollars in questionable cash paymentsover a decade from the early 1990s, broke three weeks ago whendetectives moved at short notice to question Olmert on May 2.
The prime minister has faced a handful of inquiriesrecently into his past financial affairs as mayor of Jerusalemfor 10 years until 2003 and subsequently as a cabinet ministeruntil he succeeded the ailing Ariel Sharon as premier in early2006.
He has withstood all those challenges and said he didnothing wrong in his dealings with New York Jewish fundraiserMorris Talansky. He has promised to step down if prosecutorscan produce enough evidence to indict him.
The mass-selling Israeli daily Maariv said on Friday thatpolice were trying to determine whether Olmert helped Talanskyadvance business ventures in South America.
"The prime minister is convinced that as this investigationcontinues it will become clear that he has done nothing wrong,"Olmert's spokesman Mark Regev said.
Talansky, who was questioned after he arrived in Israel onholiday last month, also denies wrongdoing. A court decided onFriday that he should give sworn testimony on Tuesday. Olmert'slawyers had tried to prevent any such statement being taken.
PEACE TALKS
A police source said on Thursday that Israeli investigatorswould travel to the United States "in the coming weeks" tocontinue the investigation in the Olmert case.
Olmert and his allies have stressed his importance both toIsrael and internationally at the forefront of U.S.-sponsoredpeace negotiations with the Palestinians and, as of this week,Turkish-mediated talks with Syria. Critics have suggestedOlmert revealed the Syrian contacts to draw the sting of thescandal.
Olmert aides have suggested that the investigation has beenprompted by right-wingers angered by negotiations with thePalestinians that could result, notably, in a deal to let thePalestinians site the capital of a new state in Jerusalem.
On Thursday evening, Olmert was interrupted during a speechby demonstrators angered by his latest initiative to open talkswith Syria that, he has said previously, could mean Israelgiving back the Golan Heights, captured from Damascus in 1967.
Olmert acknowledged earlier this month that Talansky raisedfunds for his two successful campaigns for mayor of Jerusalemin 1993 and 1998, a failed bid to lead the right-wing Likudparty in 1999 and a further internal Likud election in 2002.
He has said that his former law partner handled thedetails, voicing confidence the attorney made sure properprocedures were followed. Israeli media reported that Friday'squestioning of Olmert focused on testimony that his attorneyhad given.
(Editing by Sami Aboudi)