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Wed 17 Jan 2007 12:42 PM

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Olmert probed on Bank Leumi sale

Israeli PM is under intense pressure as police launch corruption investigation and chief of armed forces quits.

Israeli Prime Minister Ehud Olmert is under intense pressure after police decided to launch an investigation into his involvement in the 2005 privatisation of Bank Leumi, the second-largest Israeli bank.

The state prosecutor ordered the criminal investigation on Tuesday, in the latest of a string of corruption charges against Olmert and other Israeli politicians.

It has been alleged that while finance minister, Olmert tried to help two businessmen wanting to buy Bank Leumi. The two men were described as ‘close friends’ of Olmert.

"The findings of the preliminary investigation led to the conclusion that there was a sufficient evidence to open a criminal investigation," a statement from the Israeli justice ministry said.

A US investment group, to which the businessmen were unconnected, eventually acquired a controlling stake in Bank Leumi.

In a development unconnected with the Bank Leumi action, it was reported today that Olmert has accepted the resignation of the chief of the Israeli armed forces. Lieutenant-General Dan Halutz’s departure was due to “his responsibility for the setbacks of last year's Lebanon war,” according to Reuters.

A poll published on Friday, cited by Reuters, indicate that Olmert's approval ratings had slipped to 14% and his Kadima party would lose nearly two-thirds of its strength in an election.

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