JERUSALEM - Israel's defense minister said Wednesday he would use his considerable power to topple the fragile coalition government if Prime Minister Ehud Olmert does not step aside to face corruption allegations.
The tough ultimatum by Ehud Barak, a former prime minister and now leader of the Labor Party, increased the growing pressure on Olmert to resign in the wake of a U.S. businessman's court testimony that painted Olmert as a money-hungry politician.
Olmert has denied any wrongdoing and said he would resign only if he is indicted.
At a news conference, Barak said that in light of the criminal investigation, he did not think Olmert could focus on peace efforts and the country's pressing security needs.
"I don't think the prime minister can at the same time lead the government and handle his own affairs. Therefore, acting out of concern for the good of the country ... I believe the prime minister must disconnect himself from the day-to-day running of the government," he said.
There was no immediate reaction from Olmert. But earlier Wednesday, Olmert aide Tal Zilberstein said the prime minister "doesn't have any intention to resign or to step down temporarily, even if Barak asks him to."
Olmert's spokesman, Mark Regev, said the prime minister was continuing his daily schedule. "It's business as usual," Regev said.
State Department spokesman Tom Casey declined to speculate on the possible effect of a change in leadership on the U.S.-backed peace process.
"I'll leave it to the Israelis to have their own internal political debate and discussions," Casey said Wednesday. "One thing that has been important to us of course is that we have had legitimate partners for peace between (Palestinian) President (Mahmoud) Abbas and Prime Minister Olmert that represents not only their own personal interests but of course the views of their government."
Barak said Olmert could suspend himself, resign or even go on vacation. He promised to cooperate with a new leader from Olmert's Kadima Party, but vowed to force new elections if Olmert doesn't step aside.
"If Kadima doesn't act and this parliament doesn't see another government that is to our liking, we will act to set an agreed-upon date for early elections," he said. He said the date would be "soon."
Although Barak stopped short of setting a firm deadline, his comments made it extremely difficult for Olmert to stay in power. If Labor withdraws from the coalition, Olmert would lose his parliamentary majority and the country would be forced to hold new elections.
Israel's popular foreign minister, Tzipi Livni, would become caretaker prime minister if Olmert stepped down. The party then could try to form a new government, and if that effort failed elections would likely ensue.
Livni and other Kadima leaders have remained silent since Tuesday's damaging court testimony, although one junior Kadima lawmaker, Amira Dotan, urged Olmert to resign. Israeli media reported that several ministers already were positioning themselves to replace Olmert.
Olmert is the latest in a long line of Israeli leaders plagued by scandal. Former Prime Minister Ariel Sharon was accused of campaign funding violations, as was Barak himself when he was prime minister in 2000. Israeli President Moshe Katsav was forced to resign in June 2007 under a cloud of rape and sexual assault charges.
The current investigation into Olmert's dealings is the fifth since he became prime minister. Although he has never been charged, the current scandal appears to be the most serious.
It appears Olmert's best hope for survival is Barak not following through on the promise, as happened last year when the Labor leader failed to honor a vow to leave the government after a damaging report on Olmert's handling of the 2006 Lebanon war.
One thing that might keep Barak from bolting the government is the candidacy of hardline politician Benjamin Netanyahu, whose rise to power for a second time could freeze Israel's peace efforts.
Israeli dailies were plastered with quotes from Talansky's testimony and headlines blasting Olmert. "Disgusting," read one on Yediot's front page, referring to Olmert's alleged misdeeds. Israeli media also quoted Barak as having referred to Olmert's behavior as "disgusting."
Israeli prosecutors are investigating tens of thousands of dollars in donations collected by Olmert before becoming prime minister in 2006. They suspect he may have violated campaign finance laws or accepted bribes.
On Tuesday, the key witness in the case, U.S. businessman Morris Talansky, testified that he personally gave Olmert $150,000 over 15 years, often in cash-stuffed envelopes.
Talansky said he gave Olmert money beginning in 1991. Olmert became Jerusalem mayor in 1993, serving for a decade at the end of which he was named ministry of industry and trade.
Talansky, 75, said he did not get anything in return for the money. Instead, he said he overlooked questions about Olmert's request for cash due to his admiration for Olmert and his belief in Olmert's ability to unite the Jewish people. Olmert's lawyers are scheduled to cross-examine Talansky on July 17.
Talansky's testimony is the latest blow to Olmert, who has been deeply unpopular since Israel's inconclusive war against Hezbollah guerrillas in Lebanon in 2006.
Olmert has set a year-end target for reaching a peace deal with the Palestinians. Last week, he also announced the resumption of peace talks with Syria after an eight-year break. Now, both peace efforts are in jeopardy.
Palestinian negotiator Saeb Erekat dismissed the crisis as an "internal Israeli matter" and said the Palestinians "hope this will not impact the ongoing negotiations."
