State Comptroller Micha Lindenstrauss has recommended that police investigate Prime Minister Ehud Olmert on suspicion of illicitly arranging investment opportunities for friends while in a previous cabinet post, officials said Wednesday.

The Knesset State Control Committee will hold a special session next week over the suspicions. The parliamentary panel chairman, MK Zevulun Orlev (National Religious Party-National Union), on Wednesday announced he would convene the committee next week and would exercise his power to summon Olmert to the hearing.

Lindenstrauss made the recommendation in a letter submitted to Attorney General Menachem Mazuz, who is responsible for ordering high-level investigations and prosecutions, the Justice Ministry said.

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The suspicions center on Olmert's tenure as industry and trade minister under former Prime Minister Ariel Sharon, when he oversaw a government-level "investment center."

Lindenstrauss said in the report that "Olmert did not refrain from dealing with issues involving his friend, former partner and current attorney, Uri Messer, who initiated the request for financial benefits from the state through the Industry Ministry's Investment Center."

The affair was first exposed in Haaretz in August 2006.

The comptroller said "Olmert should have removed himself completely from dealing with the company's request, put forward by Messer, and in not doing so placed himself in a conflict of interest. Olmert's connections with Messer and his involvement in advancing the project... despite the conflict of interest in which he was immersed, raise suspicions about his ethics."

Messer headed the foundation for Olmert's election for Jerusalem mayor in 1998 and was previously his legal colleague.

Despite their professional connections, Olmert became involved in the matter "in an active and intensive" way, "by receiving decisions and guidance from the professional staff, which had many reservations about this factory," the report said.

Orlev said the report required the prime minister to immediately suspend himself.

"The report points at serious corruption suspicions and the prime minister has no alternative but to suspend himself and go on leave in order to face the criminal suspicions that arise from this and other reports," Orlev said.

Olmert, who has sparred with Lindenstrauss over a slew of impropriety allegations, denies wrongdoing in the latest case.

The prime minister's office said in response that "The comptroller's handling of this issue, as of other issues, regretfully reached new records of unprofessional behavior and bias."

"The prime minister has lost faith in the state comptroller," the statement said. "We have no doubt that this 'affair', like all the other 'affairs' which were looked into by the state comptroller and ended in nothing, will blow away like foam on the surface of water."

MKs call for Olmert's resignation
MK Ophir Pines-Paz (Labor) said in response to the report that "the Labor party must immediately leave Olmert's government."

Pines said that the Olmert government is barely surviving, and is going in no direction, and called the report "another nail in the [government's] coffin."

Meretz chairman Yossi Beilin called for Olmert's immediate resignation in order to make room for a prime minister "that can find the time to deal with the national and social challenges standing before Israel." That way, Beilin maintains, Olmert can dedicate himself "to deal with the many allegations against him."

MK Limor Livnat (Likud) said that "we must dismiss the prime minister's merciless attack on the state comptroller regarding the investment center."

"No distraction from the prime minister will excuse him for giving concrete answers to this serious report," Livnat said.