Omets, a non-profit watchdog organization, accused Defense Minister and Chairman of the Labor party Amir Peretz on Sunday of using party funds to finance debts he incurred during the party's last primaries.

Omets submitted documents to the State Comptroller on Sunday that the group maintains contain proof of severe irregularities in the Labor party's finances.

Omets Chairman, Aryeh Avneri, suspects a report detailing Peretz's financial activities during his campaign for leadership of the party contains falsified information.

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Omets maintains new evidence has surfaced, putting the veracity of the financial report submitted by the party to the State Comptroller's office into question.

"We must direct public attention to the fact that the Labor party treasurer was neutralized out of fear that he would not cooperate with the allegedly illegal financial activity," Avneri wrote in a letter sent out Sunday morning, "and was replaced with an Am Ehad member." Am Ehad was a socialist political party founded by Peretz in 1999, which merged with the Labor party in 2004.

In response, Secretary General of the Labor party Eitan Cabel said Sunday anyone who suspects the party of illegal financial activity should raise the issue with the police. Should an official complaint be filed, he declared, the party will cooperate fully in the investigation.

Other sources within the party reported that a defamation suit against the slanderers is taking shape.