Israel's Olmert admits taking cash but won't quit

By Alastair Macdonald

JERUSALEM (Reuters) - Israeli Prime Minister Ehud Olmert admitted on Thursday taking cash from a U.S. businessman but resisted calls to resign over a police investigation into alleged hefty bribes over almost a decade.

As Israelis enjoyed festivities marking Independence Day and the 60th anniversary of the founding of their state, police lifted a week-old media gag order and announced details of accusations that sparked opposition calls for Olmert to quit.

He said he would resign only if he were formally indicted.

Whether he goes or not, doubt over his future is likely to upset his faltering, U.S.-sponsored peace negotiations with the Palestinians and will cast a heavy cloud over next week's celebratory visit to Israel by U.S. President George W. Bush.

The White House said Bush still intended to make the trip.

Olmert, in a late-night televised address to the nation, said: "I look each and every one of you in the eye and say, 'I never took bribes. I never took a penny for myself'."

His allies say there is a right-wing campaign to wreck the peace process, but it was unclear if his fragile coalition would rally behind a man who last year said he was "indestructible".

Israelis are no strangers to tales of corruption at the top in the Middle East's most feted democracy and the latest case may fuel calls for an overhaul of political funding rules.  Continued...