Israeli police seize documents in Olmert probe

JERUSALEM (Reuters) - Israeli police said on Monday they searched Jerusalem's city hall and confiscated documents as part of a bribery investigation that could force out Prime Minister Ehud Olmert.

Olmert admitted last week that he took cash from an American businessman at the centre of the investigation but he has denied any wrongdoing. Olmert said he would resign if indicted.

The investigation could overshadow a visit this week by U.S. President George W. Bush to mark Israel's 60th birthday and to promote peacemaking with the Palestinians.

"Today the National Fraud unit carried out a search in the offices of the Jerusalem municipality and confiscated documents and other materials as part of its ongoing investigation involving the prime minister," a police spokesman said.

Legal sources say police suspect that Olmert took hundreds of thousands of dollars from the businessman, New York Jewish financier Morris Talansky, over a decade in coded payments.

Olmert said any funds from Talansky were contributions to two campaigns for Jerusalem mayor in the 1990s and for posts in his former political party, Likud, in 1999 and 2002.

Current Israeli law broadly prohibits political donations of more than a few hundred dollars.

An opinion poll in a major Israeli newspaper on Monday showed that a majority of Israelis want Olmert to resign or go on leave over the scandal and do not believe his denials.

Olmert, who once described himself as "indestructible", has survived several earlier corruption investigations.

(Reporting by Adam Entous; Editing by Sami Aboudi)