By Jeffrey Heller JERUSALEM, May 11 (Reuters) - Top members of Israeli Prime Minister Ehud Olmert's party closed ranks behind him on Sunday, praising his response to bribery suspicions that could force him from office and disrupt peace efforts with the Palestinians. Olmert pressed on with his duties, chairing the weekly cabinet meeting and shifting his public focus towards a visit later in the week by U.S. President George W. Bush to celebrate Israel's 60th anniversary and promote peacemaking. "It is absolutely clear that right now it is not possible to demand of (Olmert) more than he has already said -- that he would resign the moment there is an indictment," said Finance Minister Roni Bar-On, a member of Olmert's Kadima party. Transport Minister Shaul Mofaz, speaking at a meeting Olmert convened with Kadima ministers in his cabinet, said: "Every citizen has the right to be considered innocent ... We must let him continue running the country." Kadima sources said only Foreign Minister Tzipi Livni, Olmert's main rival in the party, did not make any comments at the session. Denying taking any bribes, Olmert said on Thursday he would quit if the attorney-general indicted him in an investigation of funds received from an American businessman. Police are still investigating and charges do not appear imminent. The prime minister, who has pledged to pursue government business as usual, did not refer in remarks to the cabinet to the latest in a series of corruption allegations against him. He focused instead on the Bush visit and ongoing violence on the Israel-Gaza border, citing what he called the "substantive matters of crucial strategic value" to Israel's future which he said he would discuss with the U.S. leader. In a speech on Saturday, Olmert pledged not to relent in his efforts to "put an end to the bloody conflicts which have accompanied our life in this country since its establishment and beforehand". FUNDS Legal sources say police suspect that Olmert took hundreds of thousands of dollars from New York Jewish financier Morris Talansky over a decade in coded payments. Olmert said any funds from Talansky were contributions to two campaigns he waged for Jerusalem mayor in the 1990s and for posts in his former political party, Likud, in 1999 and 2002. Israeli law broadly prohibits political donations of more than a few hundred dollars and senior figures, notably the son of Olmert's predecessor, Ariel Sharon, have been jailed for accepting larger or undeclared sums. But Israelis have grown used to tales of corruption at the top and many noted that several long-running police investigations against Olmert have yet to produce any formal charges. Bush arrives in Israel on Wednesday amid deep scepticism over whether Washington can achieve its goal of reaching an Israeli-Palestinian peace deal before the president leaves office in January. The White House has played down the possible impact of the Israeli scandal, insisting Olmert is not the only leader committed to the peace process with Palestinian President Mahmoud Abbas. But Palestinian officials have acknowledged privately that Olmert's troubles could derail statehood talks, especially if Israel held a snap election, which opinion polls have shown that right-wing Likud leader Benjamin Netanyahu would win. An election also could spell the demise of Kadima, a new party that political commentators have speculated could not survive a scandal that brought down its leader. (Editing by Charles Dick)
Palestinian children hold up flags and a key commemorating the "Nakba", or catastrophe, while protesting the 60th anniversary of the state of Israel in the West Bank village of Bedo, south ...
