The police will take "initial steps" to determine whether to open a criminal investigation into Prime Minister Ehud Olmert's role in the sale of the controlling interest in Bank Leumi.

The decision followed a meeting on Sunday night in the offices of Attorney General Menachem Mazuz attended by State Prosecutor Eran Shendar and other officials.

"At this stage we are talking about only a preliminary examination, not a criminal investigation," Justice Ministry officials emphasized on Sunday night.

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Mazuz's decision came in the wake of a letter sent to him last week by State Comptroller Micha Lindenstrauss, recommending a criminal investigation. Lindenstrauss began looking into Olmert's involvement as acting finance minister in 2005 in the Bank Leumi sale following his examination of the tender to privatize the bank.

The State Prosecution has been working on the case for more than three months. Attorney Michael Karshen, who was part of the investigation team, wrote a legal opinion containing an unequivocal recommendation to launch a criminal investigation.

Justice Ministry officials explained last night that the aim of the new phase of the investigation, involving the police, is to collect evidence and take statements from witnesses "in order to expand the factual foundation" for the prosecution's report. That opinion will be submitted to Mazuz, who will then decide whether the facts and the evidence support the initiation of a full criminal investigation against Olmert.

Olmert is suspected of interfering with the tender for the controlling interest in Bank Leumi in 2005, when he was acting finance minister, in order to help his friend businessman Frank Lowy, and others. Olmert is suspected of bribery, fraud and breach of trust in the affair.

Olmert is also suspected of a conflict of interest through a law firm headed by Prof. Yossi Gross, the prime minister's father-in-law, who dealt with Lowy's affairs in Israel.

The key witness against Olmert in the case is Finance Ministry Accountant General Yaron Zelikha, who was involved in the process of selling the controlling stake in Leumi from beginning to end. Officials in the State Comptroller's Office said there was enough evidence in Zelikha's testimony to warrant a criminal investigation into all of the allegations against Olmert.