Report: N.Y. Investor Called to Testify in Israeli Scandal

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The fate of the latest round of Middle East peace negotiations — and the career of Israeli Prime Minister Ehud Olmert — may lie with an unassuming businessman from Long Island.

To assist with their bribery probe into Israeli Prime Minister Ehud Olmert, above, Israeli officials have reportedly asked a New York philanthropist to testify against Olmert.

(ABC News Photo Illustration)

Morris Talansky, a 75-year-old philanthropist, reportedly has been approached by Israeli authorities who want him to testify as part of their investigation of Olmert, which involves allegations of bribery, or campaign finance irregularities, when Olmert was mayor of Jerusalem in 1999.

Although police imposed a gag order to prevent publication of information about the case, Talansky's name has been published in the New York Post and The New York Times.

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Olmert has reassured aides and cabinet officials that he did not take bribes, but the rumors have crippled him politically amid speculation that he may be forced to resign.

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"I promise that, once things are cleared by the authorities, things will be put in the right proportions, the right and accurate context, and that will put an end to the rumors," Olmert told reporters earlier this week.

The widening probe also threatens efforts to restart negotiations with Palestinians, which have been shepherded by Secretary of State Condoleezza Rice and President Bush, who is due to visit Israel next week.

Though Israeli officials maintain negotiations are still on track, a senior Palestinian official expressed concern about the impact on talks.

"As of now, there is no Israeli partner for talks on a final status agreement in light of the continuing investigation against Olmert," the Palestinian aide told Haaretz, an Israeli newspaper.

Talansky and his wife, Helene, recently arrived in Israel to spend Passover with his daughter and son, according to The New York Times.

One of his connections to Olmert appears to be the New Jerusalem Foundation, a charity which raises money for Israeli causes.

Founded by Olmert in 1999, the charity listed Talansky as the group's treasurer on 2006 tax returns, paying him $7,967 that year, it stated.

The group's president was listed as Uri Lupoliansky, the current mayor of Jerusalem, and its vice president was Zvi Raviv, a former top aide to Olmert.