Israel's Prime Minister Ehud Olmert (R) and Foreign Minister Tzipi Livni attend the weekly cabinet meeting in Jerusalem April 6, 2008. (Xinhua/Reuters Photo) 

Talansky told a preliminary hearing at Jerusalem District Court on Tuesday that he gave Olmert envelopes of cash amounting to no less than 150,000 US dollars over a 15-year period.

The testimony is part of an investigation into Olmert, who is suspected of illegally receiving hundreds of thousands of dollars from Talansky.

Early on Thursday, Israeli Defense Minister and Labor Party chairman Ehud Barak said in a meeting with his Labor Party ministers that early elections appear inevitable in light of the corruption probe currently hanging over Olmert.

"For the sake of political stability, an alternate government headed by one of the members of Kadima, must be established, but it is very likely that there will be elections sometime during the coming year," said Barak.

Barak Wednesday called on Olmert to step aside over corruption allegations or resign at a press conference in Jerusalem, warning that if Olmert does not quit, Labor Party will move towards early elections.

In response to Barak's call, Olmert said Wednesday evening that he will continue to function as prime minister and will not step down despite ongoing bribery investigation against him.

Olmert said it is inconceivable that a prime minister will be condemned based on a single testimony, adding that he will issue a statement in the next few days.

Olmert has said he would resign if indicted, but State Prosecutor Moshe Lador said it is too early to say if an indictment will be issued, and a decision is to be made only after the completion of police investigations.

(Xinhua News Agency May 30, 2008)