Israeli police said on Sunday Prime Minister Ehud Olmert should face criminal charges, issuing a non-binding recommendation in a corruption scandal driving him from office in the midst of peace talks with the Palestinians.
Police said they have evidence showing that Olmert illegally received money from a U.S. businessman and made duplicate claims for travel expenses while he previously served as mayor of Jerusalem and trade and industry minister.
He has denied any wrongdoing in a series of investigations.
A police statement said the recommendation included charges of bribery, fraud, money laundering and breach of public trust over funds that "reached hundreds of thousands of dollars".
With Olmert committed to resigning after his Kadima party holds a leadership vote on Sept. 17, the recommendation will have no immediate impact on his tenure and does not guarantee an indictment will be filed by Israel's attorney-general.
Olmert's lawyers called the police recommendation "meaningless" because only the attorney-general can decide whether or not to indict a prime minister.
"We will wait patiently for the attorney-general's decision, and as opposed to the police, we have no doubt in our hearts he is well aware of the responsibility he carries," the lawyers said in a statement.
LEGAL CASES
One case focuses on New York-based fundraiser Morris Talansky who testified in an Israeli court in May he had given Olmert $150,000 in cash-stuffed envelopes over a 15-year period.
The police statement said: "The investigation showed that Talansky transferred to Olmert over the years, at least since 1997, significant sums of money, in different ways, some in cash and illegally."
At the same time, Olmert used his position to promote Talansky's businesses, the police said.
The second case deals with allegations that Olmert double billed trips abroad with public institutions, including Israel's Yad Vashem Holocaust memorial, and used the extra money to fund private trips for himself and his family.
Under Israeli law, police submit their recommendation to the prosecution which then files its own legal opinion to Attorney-General Menachem Mazuz, who is the only one authorised to indict a prime minister.
A prosecution source said it would take at least several weeks for Mazuz to decide. Mazuz has in the past turned down police recommendations to indict a sitting prime minister.
Olmert, who has vowed to pursue U.S.-backed peace talks with the Palestinians, could stay in office for weeks or months while his successor tries to form a new government coalition.
Polls show Israeli Foreign Minister Tzipi Livni as the front-runner in a Kadima race pitting her against Transport Minister Shaul Mofaz, a former defence chief.
Palestinian negotiator Saeb Erekat said of the police recommendation: "This is an internal Israeli matter, but we hope that the internal complexities will not lead to more settlements and incursions."