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If there were doubts as to whether American fund-raiser Morris Talansky was lying or just confused - yesterday, on the fourth day of the cross-examination in the cash envelopes affair, the answer was clear.

Talansky, who testified so clearly and convincingly in his preliminary testimony that he did not remember a $380,000 transfer from his accounts to those of Prime Minister Ehud Olmert's former law partner, attorney Uri Messer, was caught red-handed.

In May, after police showed him the money transfer orders from one of his accounts to that of Messer, Talansky told the court: "When I saw them for the first time, I was in shock. I asked the police who the account in Jaffa belonged to and who the trustee was, since I didn't know anything about it," he said.

Talansky hinted that Messer used his accounts without his knowledge, and abused the power of attorney Talansky had given him for the purchase of a Jerusalem apartment.

His body language during the police interrogation also reflected shock and surprise. "I told you, I don't know anything about it," he told police investigators. "Give me a lie detector test! Maybe he had a power of attorney and he used my money," said Talansky.

But in yesterday's court session, Olmert's attorney Navot Telzur proved he knew all about it. In a slow, torturous process, he pulled out document after document and slowly brought down Talansky's house of cards. He presented a letter in Talansky's handwriting, ordering his bank to transfer $100,000 to Messer's account. Then he presented another order in his handwriting for $50,000, and another, and another - all in Talansky's handwriting, amounting to tens of thousands of dollars transferred to the prime minister's confidantes.

Talansky continued to insist that he did not remember, dozens of times. Telzur accused him of not having a memory problem, but one of telling the truth.

The prosecution says it knew of the contradictions and does not disagree with the defense on the matter.

After yesterday's session, the Jerusalem District Court ruled that Talansky's cross-examination, which will continue today, would resume on August 31 and September 1. The court rejected a request for an order to postpone Talansky's departure from Israel, to allow for additional time to question him. The request, made by State Prosecutor Moshe Lador, was said to have aroused the judges' amazement. It was also opposed by Talansky's attorney, who said of his client, "Here is a man who has made a serious effort. But the possibility of keeping him here for an additional period of time is not a possibility that exists, from our point of view."