Israeli police quiz PM again in bribery case

Israeli police questioned Prime Minister Ehud Olmert for a sixth time on Friday over fraud and bribery allegations that have shaken Israel's political system and jeopardised peace talks with the Palestinians.

Detectives questioned Mr Olmert at his official residence in what has become a familiar Friday morning pattern since the scandal broke in May. It led last month to Mr Olmert announcing he would resign once a successor is chosen.

Police will return to question the Premier next Friday, Israeli media later reported.

Mr Olmert will meet US Secretary of State Condoleezza Rice in Jerusalem early next week as she and President George W. Bush struggle to reach some form of accord to create a Palestinian state before Mr Bush leaves the White House in January.

Mr Olmert's resignation as Prime Minister, which could take effect as early as mid-September but could also be further delayed by weeks and months, has been a blow to the halting, nine-month-old US-sponsored peace process.

The Prime Minister, suspected of taking bribes from an American businessman and of making false travel expense claims, could step aside immediately after his centrist Kadima party votes in a leadership election on September 17.

A second round of voting may be required a week later if neither of the frontrunners, Foreign Minister Tzipi Livni and Transport Minister Shaul Mofaz, secures 40 per cent.

But Mr Olmert could remain Prime Minister while his successor as party leader works to secure a new parliamentary mandate for what will inevitably be a fractious coalition.

Mr Olmert has vowed to pursue talks with the Palestinians and Turkish-mediated negotiations with Syria until his last day in office. But rival politicians have said he lacks the mandate to commit Israel to any deals.

Opinion polls show Mr Livni, who has a clear edge in the Kadima party race to replace Mr Olmert, running almost neck-and-neck with rightist Likud leader Benjamin Netanyahu, should snap parliamentary elections be called.

On the Palestinian side, President Mahmoud Abbas also faces doubt over his mandate, with the Gaza Strip controlled by his Hamas Islamist enemies for the past year.

Few analysts believe Dr Rice can secure a major breakthrough that would set Palestinians on a fast track to statehood. But many are reluctant to rule out that the two sides will, for a variety of personal and domestic political reasons, comply with Mr Bush's exhortations and agree to some formal, limited accord.

Mr Livni said on Thursday that external pressure to paper over differences to reach an accord could be dangerous, however, by creating tensions that could lead to more violence.

A spokesman for Dr Rice said Washington would not push the two sides into a deal they did not want but said US officials still believed some form of deal was possible this year.