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United States authorities said Sunday they were prepared to offer partial immunity to American businessman Morris Talansky, the key witness in a corruption probe currently underway against Prime Minister Ehud Olmert.

According to the offer, any prospective testimony given by Talansky in an Israeli courtroom will not be used as direct evidence against him.

The testimony may be used in other instances, for example, as a lead to assist the Department of Justice in its investigation, to cross-examine Talansky should he be brought before an American court, and as rebuttal to any assertions made by Talansky or his attorneys.

The U.S. Federal Bureau of Investigation (FBI) decided last year to open a probe into Talansky's conduct, a move which came as no surprise to Israel's police investigators.

Senior police officials said it is customary for the FBI to become involved in Israeli investigations being conducted within the U.S.

Olmert is being investigated for allegations that he accepted illicit funds over many years from Talansky. In his preliminary deposition in Jerusalem on May 27, 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.

Superintendents Tzachi Havkin and Lior Rice, who set out some two months ago to conduct parts of the investigation in the U.S., personally met with FBI representatives during their stay. The police have classified the investigators' activities in Washington, New York and Las Vegas as top secret, though most of the material they gathered has already been handed over to the prosecution and to Olmert's attorneys.

Police officials declined to divulge details of the investigation or the names of the individuals questioned in the U.S.

"It was fairly clear to us that it was merely a matter of time before the U.S. would launch an investigation into Talansky," a police official said. "No one knew when the investigation would be launched, but the case materials certainly raised suspicions regarding Talansky's conduct. We mustn't forget that Morris Talansky is considered a suspect in the case and that the legal system in the U.S. is viewed as very tough on anything having to do with the transfer of money to politicians, and especially foreign politicians."

Since the onset of the investigation the police and the prosecution have operated on the assumption that Talansky is not entirely innocent, and that there is a significant gap between his claims of innocent money transfers to Olmert, and his actual reasons for giving Olmert the money.