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American millionaire Morris Talansky personally handed money to Prime Minister Ehud Olmert on several occasions, State Prosecutor Moshe Lador said yesterday.

Lador was speaking at a High Court of Justice hearing on a petition by Olmert and his former bureau chief, Shula Zaken, against the Jerusalem District Court's decision to depose Talansky even before any indictment is filed.

Justices Eliezer Rivlin, Salim Joubran and Edna Arbel will apparently rule on the matter today or tomorrow.

Lador publicly detailed the suspicions against Olmert in the latest case for the first time. These suspicions, which include fraud and breach of trust, involve the receipt of cash back when Olmert served as minister of industry and trade and mayor of Jerusalem.

"While Olmert served as a minister in the Israeli government, he allegedly received funds from Talansky, in Israel and abroad, sometimes through Zaken," Lador said.

Lador said that Talansky told investigators that he and Olmert met several times, usually briefly, during which he gave Olmert envelopes full of dollars. Lador also told the court it would be significant if "something was given in exchange" for this money. He also mentioned possible infractions of tax laws.

Lador noted that Olmert is not being questioned like an ordinary suspect: The police have been asking him for four days to set aside time for an interrogation, but Olmert has not done so.

Speaking on Army Radio after the hearing, Olmert's lawyer, Navot Tel-Tzur, said the prosecution had failed to present new facts that would justify prior testimony by Talansky.

The prosecution wants Talansky to testify now, before an indictment is filed, on the grounds that he may refuse to return to Israel. Talansky announced earlier this week that he would not stay in Israel after May 26, and his lawyer, Jacques Chen, explained to the court that his client had to return to the U.S. now for business and to care for his wife.

However, Chen added, Talansky would post a bond to ensure his return, and in any case plans to return to Israel on June 11 for a family event.