The New Nation - Internet Edition

AFP, Jerusalem

Israeli police grilled Prime Minister Ehud Olmert again on Friday over graft allegations that have dogged his term in office, two days after his surprise resignation announcement.

It was the fourth time since May that anti-fraud squad officers have interviewed Olmert, 62, at his official residence in Jerusalem in connection with the allegations of wrongdoing, which he has strongly denied.

Police remained tight-lipped but the questioning was likely to focus on allegations Olmert illegally received electoral and other funding from a wealthy US financier and that he sent out multiple bills for the same overseas trips. The latest round of questioning came just two day after the premier announced he would step down after a September 17 leadership election in his centrist Kadima party. His decision to go has cast a shadow over already slow-moving US-backed peace negotiations with the Palestinians and recently revived indirect talks with Syria and raised the spectre of political turmoil in Israel.

Olmert had faced a growing chorus of calls for his resignation in the face of six scandals over his conduct in the years before he took office in 2006, when he was mayor of Jerusalem and trade and industry minister.

"I have made mistakes and I regret it," Olmert said on Wednesday when he announced his decision to go.

"I will quit my duties in an honourable, just and responsible manner, as I have acted throughout my mandate. I will then prove my innocence."

On Thursday, Olmert's top diplomatic aide Yoram Turbowicz announced he would quit later this month. Widely considered the premier's closest advisor, Turbowicz is described by Israeli media as Olmert's pointman with the administration of US President George W. Bush.

As hopefuls jockeyed for position ahead of the Kadima party vote, the future of the government coalition appeared increasingly uncertain.

Israeli media said it appears whoever wins the party primary would be unable to form a new coalition. This means Olmert may remain at the head of a caretaker government for months until a general election is held.