JERUSALEM (AFP) — Israel was abuzz with speculation on Thursday after the governing coalition's key partner warned he would force early elections if Prime Minister Ehud Olmert does not resign over graft allegations.
The possibility of a snap election in late 2008 or early 2009 is looking increasingly likely, experts say.
"Why? Because the prime minister does not intend to take leave, resign or declare incapacitation," the Yediot Aharonot newspaper said in an editorial.
As pressure on Olmert mounted, Attorney General Menahem Mazuz decided after a meeting with the state prosecution "to speed up the investigation in order to conclude it as soon as possible," the justice ministry said.
On Wednesday, Defence Minister and Labour party leader Ehud Barak demanded Olmert's resignation over allegations he illegally received large amounts of cash from a US financier for electoral campaigns and possibly for personal use.
Olmert, whose term ends in November 2010, said he had no intention of quitting, although an opinion poll on Thursday found that 70 percent of people surveyed thought he should go.
"I am going to continue to exercise my functions," the embattled prime minister said on Wednesday.
"Some people think that each time an investigation is launched, it has to lead to a resignation. But I don't share that opinion -- and I am not going to give up."
Olmert, 62, has denied any wrongdoing over the allegations that have been simmering since police first questioned him in the affair on May 2. He has, however, acknowledged receiving campaign donations.
But experts say it will be difficult for Olmert to focus on peace talks with the Palestinians and indirect negotiations with Syria while fighting for his own political survival.
Opposition lawmakers have also claimed that the scandal-tainted premier lacks the moral authority to lead peace efforts that could shape the future of the Middle East.
And support for Olmert, who has already weathered a string of scandals and massive unpopularity in the past, appeared to be waning rapidly even within his centrist Kadima party.
Foreign Minister Tzipi Livni, who would replace Olmert if he resigns, has made oblique references to the damage done by the allegations.
"Israel must defend itself for its physical survival but must also defend its moral values," she said. "The state must have a vision and values that apply to itself and the citizens."
Olmert, who flies to Washington on Monday for a three-day visit and a meeting with US President George W. Bush, has asked Kadima MPs not do anything until his return, the Maariv newspaper reported.
Barak, himself a former premier, said that unless Kadima acts to form a new government, with Labour's support, "we will work to decide on a new agreed early date for elections."
Without the support of Labour's 19 MPs, Olmert's coalition would lose its parliamentary majority in the 120-member Knesset.
Barak dropped the political bombshell a day after Jewish-American financier Morris Talansky testified before a Jerusalem court that he had given Olmert vast amounts of cash stuffed into envelopes.
Talansky said he had given Olmert at least 150,000 dollars in the 14 years before he became prime minister in 2006, some of which might have been used to fund Olmert's taste for luxury goods.
Housing Minister Zeev Boim, who is considered very close to Olmert, denounced what he called "a settling of scores" but added: "One must admit the Talansky's testimony caused great embarrassment."
Media reports say even Olmert's closest aides were pressing him to quit.
"The people closest to him are telling him: 'Ehud, for your self-respect, get up and go,'" Yediot Aharonot said.
"When a prime minister has such problems, his attention is elsewhere," said political analyst Efraim Inbar of Bar Ilan university.
Olmert, who became premier in 2006, faces three more police inquiries into suspected corruption involving potential conflicts of interest, fraudulent property transactions and abuse of power linked to political appointments.
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