Key witness against Olmert cross-examined

By Jeffrey Heller

JERUSALEM (Reuters) - Israeli Prime Minister Ehud Olmert's lawyers cross-examined on Thursday a U.S. businessman whose damaging portrait of a politician with his hand out for cash stands at the centre of a corruption case.

"I never gave a false answer," Morris Talansky said in the Jerusalem District Court about his questioning by police and his previous appearance on the witness stand in May.

Praising Olmert as someone worthy of support, Talansky, a New York-based fund-raiser for various Israeli organisations, had testified he had given $150,000 (75,000) in cash-stuffed envelopes to the former Jerusalem mayor over a 15-year period.

Both Olmert and Talansky have denied any wrongdoing.

Olmert, who has been playing up prospects for peace with the Palestinians as he clings to office, has described the funds as legal contributions to election campaigns before he became prime minister in 2006. He has said he would resign if indicted.

Olmert's lawyers focused, at the start of what could be up to five days of questioning, on poking holes in Talansky's statements to investigators and his credibility.

One of the attorneys, Eli Zohar, played a tape recording showing that Talansky, despite his denials, had asked prosecutors whether they considered him a suspect.

The line of questioning seemed to be aimed at suggesting Talansky told investigators what they wanted to hear, in order to avoid any legal moves against him.