By a Nearly 2-to-1 Margin, Israelis Want Prime Minister Ehud Olmert to Resign

JERUSALEM—George W. Bush, Tony Blair, Mikhail Gorbachev, Henry Kissinger, and a crowd of other heavyweights are coming to town this week for Israel's 60th birthday, but in a sense they have all been upstaged by Morris Talansky. The 77-year-old Long Island businessman and fundraiser is at the center of the corruption scandal that hangs over Prime Minister Ehud Olmert's future, Bush's visit, the birthday gathering of stars, and Israel's looming decision for war or peace with Palestinians in Gaza.

Israeli Prime Minister Ehud Olmert admitted he had received financial contributions for various election campaigns from U.S. businessman Morris 'Moshe' Talansky (pictured), but insisted they were not illegal.

Talansky is suspected by police of illegally funneling hundreds of thousands of dollars to Olmert before Olmert became prime minister two years ago. On Monday, fraud squad detectives raided Jerusalem City Hall looking for evidence in the files from Olmert's 1993-2003 mayoral term. The next day, they raided the government's Ministry of Industry and Trade, which Olmert headed from 2003 to 2006.

Talansky and the prime minister have admitted that large amounts of cash changed hands between them, but both deny having done anything illegal, with Olmert saying the money was donations for his campaign, not his own pocket. "I never took a penny for myself," he told a news conference.

But by a nearly 3-to-1 margin, Israelis don't believe him, and by a nearly 2-to-1 margin, they want him to resign, according to a survey this week by Mina Tzemach, Israel's leading opinion pollster. With four other corruption investigations pending against him, Olmert has promised to resign if indicted.

However, since the wheels of justice in Israel turn slowly, his most immediately pressing challenge is political rather than legal, and Tzemach's poll didn't make it any easier. The numbers showed that under Olmert's leadership, his Kadima party would be blown away in elections by the right-wing Likud, yet if Olmert were replaced by the popular Foreign Minister Tzipi Livni, Kadima would win. Livni has not declared for Olmert's job, but Likud leader Binyamin Netanyahu has, and Defense Minister Ehud Barak is waiting for his chance.

Bush probably didn't do Olmert any favors, either, in an Oval Office interview he gave to Israeli journalists on the eve of his trip. Declining to comment on the substance of Olmert's "legal matter" and describing him as "an honest guy" with whom he had "nothing but excellent" relations, the president still made clear his view that Olmert wasn't indispensable to the peace process—or irreplaceable. Hoping on his visit to spur the prime minister and Palestinian President Mahmoud Abbas toward agreement on the outline, or "definition," of a Palestinian state-to-be, Bush said, "This is not an Olmert plan. This is a plan of a government. Tzipi Livni is handling the negotiations. Ehud Barak is involved."

Olmert's gathering troubles make these talks about a "shelf agreement"—essentially an agreement in principle to act as a spur to further, more detailed talks—even more irrelevant than before, if that's possible. Abbas remains as powerless as ever while Olmert, whose government would most likely fall if he signed any agreement that Abbas would ever accept, has suddenly become even weaker than usual.

This is a glaring obstacle now that Hamas and several smaller Palestinian militant groups in Gaza have agreed to an Egyptian-brokered cease-fire with Israel, a plan that Olmert just sent back to Egypt with his objections. In itself, the killing of two Israelis by Gazan rockets in the past week makes it harder for Olmert to sell a cease-fire agreement to an angry, distrustful Israeli public, and on top of this, the corruption investigation leaves him tapped out of political capital.

After Bush heads out on Friday for the remainder of his Middle East trip, Olmert faces the decision of silencing the rockets by a cease-fire with the hated Hamas or by a ground invasion of the teeming, well-armed Gaza Strip. With fraud detectives on his tail, Olmert, 62, will be attempting quite a feat of compartmentalization, one more daunting than an Israeli prime minister should be obliged to perform.