Former Prime Minister Ehud Olmert denied Thursday that he received cash-filled envelopes from Jewish American businessman Morris Talansky.

Olmert, who has concluded the first part of the testimony in his corruption trial on Thursday regarding the Rishon Tours affair, has started his testimony on the Talansky affair on Thursday.

As part of his corruption trial, Olmert was expected to respond to three main charges – Rishon Tours, the Talansky affair, and improperly interfering in decisions at the Industry Ministry's Investment Center.

During his testimony on Thursday at the Jerusalem District Court, Olmert explained that he received funds from Talansky in three ways: political donations for his campaign, several refunds of board and lodging expenses when he spoke at events Talansky organized, and a sum of $40,000 which funded Olmert's trial expenses in 1996. Olmert denied Talansky's own claim that the former prime minister only agreed to take money from him in cash.

This was the first time Olmert commented on the affair.

When asked how he explains Talansky's allegations against him after years of close friendship, Olmert said Talansky was "fantasizing" and blamed his investigators, saying that Talansky was not understood right under the circumstances of the investigation.