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Prime Minister Ehud Olmert will be questioned by the police fraud squad on Friday for the third time in the ongoing corruption probe against him.

Olmert is being investigated for allegations that he accepted illicit funds over many years from Morris Talansky, a Jewish American businessman from Long Island, in what has been dubbed "the envelopes affair."

Talansky, the key witness against Olmert, is expected to arrive in Israel next Thursday to be cross-examined by Olmert's attorneys. Talansky already gave a preliminary deposition in the Jerusalem District Court on May 27.

Last week, Haaretz reported that senior officials in the State Prosecutor's Office and the police said inquiries made in the United States by Israeli law enforcement representatives were strengthening suspicions of fraud and other crimes against Olmert.

In his preliminary deposition Talansky testified that he gave Olmert $150,000, mostly in cash, for political campaigns and travel expenses. He denied receiving anything in return for the cash, which was allegedly conveyed in envelopes through third parties.

According to one key official, "the case against Olmert has grown stronger," following the inquiries in the U.S. Another senior official confirmed that impression, saying that "the case is progressing, and progressing nicely."

The team conducting the inquiries consists of attorney Uri Korev of the Jerusalem District Prosecutor's Office, and superintendents Lior Weiss and Tzahi Havkin of the National Fraud Unit. They traveled to New York, Washington, and Las Vegas to gather documents from banks and other sources, and to interview witnesses.

According to a senior law enforcement official, the trio flew to the U.S. on June 23 without waiting for the Justice Department's final permission, in order to speed up an American bureaucracy that was moving slowly because of a jurisdiction dispute between the federal government and local authorities. The impression in Jerusalem was that the decision to "create facts on the ground" indeed prompted the desired outcome.

Team members report back to their respective superiors: Korev answers to Jerusalem District Prosecutor Eli Abarbanel, who participates in consultations on the Olmert case with State Prosecutor Moshe Lador and his deputy for criminal affairs, Shuki Lemberger. Weiss and Havkin work for the National Fraud Unit chief, Brigadier General Shlomi Ayalon, who heads the team that twice has questioned Olmert, and is expected to question him a third time after Talansky's cross-examination.

Ayalon participates in consultations on the Olmert case by the heads of the police investigation and intelligence departments and their legal counsels.