But he also said negotiations with the Palestinians do not hinge on Olmert and identified Israel's foreign and defense ministers as possible replacements.

Olmert has said he would resign if indicted. Even if he hangs on to power, he might not be strong enough politically to win support for a peace deal that would necessarily involve sweeping territorial concessions to the Palestinians.

Even before Olmert's latest legal woes emerged earlier this month, peace talks had been listing. Palestinians are furious with Israel for continuing construction on lands they claim for a future state. They also say Israel is hampering a Palestinian economic recovery by refusing to scale back a network of West Bank roadblocks that Israel says is essential to keep out attackers.

Israel counters that the Palestinians haven't done enough to rein in militants and that no peace deal could be implemented unless Abbas regains control of the Gaza Strip, now ruled by Islamic Hamas militants after a violent takeover last June.

The U.S. president hopes to get Olmert and Abbas to work out a final peace agreement by the end of his term in January. But in an indication that deadline might be overly ambitious, Bush just said he hopes "to get something defined" by then.

The Justice Ministry has been deliberately vague on what laws the Israeli leader might have broken because the probe - expected to take months - is at an early stage, a ministry official said. But an Israeli police official has said possible directions include money laundering, graft and campaign finance violations.

He spoke on condition of anonymity because the investigation is continuing.

Police questioned Talansky again on Monday. He has agreed to remain in the country until May 21 and to "return whenever necessary" to testify in the case, Chen said.

Allegations of corruption have clung to Olmert throughout his three-decade political career, but he has never been convicted. Since becoming prime minister in 2006, he has been a suspect in several corruption affairs involving real estate deals and questionable political appointments.

Some of these investigations remain pending.

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