The state prosecutor is considering indicting both President Moshe Katsav for raping a former employee, and the employee for attempting to blackmail him.

The prosecution and police intend to complete the investigation after New Year's Eve and submit the draft indictments to State Prosecutor Eran Shendar and Attorney General Menachem Mazuz for approval.

The former employee, who was the first of several women to complain against Katsav, is scheduled to meet Jerusalem District Attorney Eli Abarbanel and the lawyers' team working on the case for the first time next week.

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The affair came to light after Katsav met Mazuz and reported that a former employee was blackmailing him. He said she had threatened that unless he gave her money, she would expose alleged offenses he had committed, sexual and otherwise.

"We haven't reached any conclusion yet, everything is still open," a senior legal source told Haaretz yesterday, referring to the possibility of indicting the complainant as well as Katsav.

"It is not illogical to present parallel indictments. Theoretically it is quite possible to charge two parties with acting against each other a man with raping a woman and the woman with blackmailing the man," the source said.

The president's men are pressuring the Prosecution heavily to investigate the blackmail suspicions against the complainant, Haaretz has learned.

Katsav's attorney, Professor David Libai, sent another letter to the attorney general on Thursday, demanding that the president be advised soon about the progress of the inquiry against the complainant.

Sources close to the inquiry said the Jerusalem District Attorney asked to meet the complainant next Tuesday to help the lawyers draft the indictment clauses pertaining to sexual harassment against Katsav.

However, other sources said the meeting may have been called to clear up the prosecution's doubts regarding the complainant's reliability.

On Thursday, Katsav denied reports that he had told the police that Likud chairman Benjamin Netanyahu was behind the "plot" against him.

"I say that a gang of criminals is plotting this libel," Katsav said in radio interviews Thursday. "It's undoubtedly been planned for a long time. I don't mean Benjamin Netanyahu, he's not behind the gang of criminals or part of them."

Katsav said the number of women complaining against him is only half as big as the media says, as half the women who reportedly complained against him did not submit a complaint.

Three of the women who complained to the police of sexual harassment had asked to work with him afterward. "They claim this [the sexual harassment] happened before they asked to work with me. I don't know what the attorney general was referring to. I know the truth and the facts, I know it's a libelous plot and I believe the truth will come out," he said.

Katsav accused the media of conducting a "witch hunt" and urged the police to wrap up the probe as quickly as possible.