The testimony that Moshe Talansky gave in court yesterday about the suspicions against Ehud Olmert has created a new situation. This testimony revealed to the public the system whereby Olmert was handed tens of thousands of dollars, directly or through his associates, in the form of grants and loans, during the years when he served as mayor and as minister of industry and trade.

Olmert's response on the evening after Independence Day ("I didn't take one cent for my own pocket") cannot be allowed to remain suspended in midair without a more detailed explanation. Even if an indictment is not submitted against him, he owes the public explanations now. Olmert must either explain or resign.

Olmert or his lawyers will presumably say that he is forbidden to talk publicly now, so as not to disrupt the ongoing investigation and undermine his legal arguments. But that argument is only suitable to a suspect who is sitting at home, cut off from the symbols of power and working hard on his defense. It cannot be used by the prime minister.

Independent of its criminal significance, a factual response is required to Talansky's testimony, which arouses an acute feeling of revulsion and repugnance. Olmert must either present a different version of the facts than was provided by Talansky in his testimony, or say that all of it is falsehoods and lies. Did he receive loans that he never returned? Did he receive cash at his offices in Jerusalem and at luxury hotels in the United States, by way of Shula Zaken and at her request? Did he demand that the money be given to him only as cash, and use Talansky's credit card? Were the sums recorded as required by law and reported to the tax authorities? Did he request, receive and not return a loan of $25,000 for a family vacation in Italy?

State Prosecutor Moshe Lador, as one would expect of a wise man, made sure yesterday to leave open the possibility that no indictment would be submitted. It is also possible that an indictment could end in an acquittal, the second in Olmert's history. But even in that case, determining the facts is important for the public discourse, and cannot wait until Talansky's cross-examination on July 17.

The behavior attributed to Olmert by Talansky is intolerable, and cannot represent the Israeli public, which is frequently called upon by its leaders to make economic and social sacrifices. Talansky's testimony reveals systematic and prolonged defilement and corruption. If his allegations do not prove false, then Olmert demanded favors - a night in a luxury hotel, or a flight - whose price is enough to support an Israeli family for an entire month. This was all done in a manner that was not only ostentatious, but also that of a beggar, seeking dollar after dollar from American Jews who responded to him and were impressed by his high status.

In 2000, Ezer Weizman was forced to retire from the presidency because Elyakim Rubinstein, then the attorney general, stated that taking money from his friends Rafi Ungar and Edouard Seroussi constituted a substantial ethical violation. And the Olmert case is more serious than the Weizman case.

It is inconceivable that Olmert should continue to enjoy the best of both worlds while the police investigation and the prosecution's preparations for a decision on the case enter a second or third month. If Olmert insists on continuing to retain his position at the government's helm, he is obliged to appear before the public, without delay, and present his version of the facts.