ISRAEL - Apr 25 - Probe Urged Into Olmert Business Allegations.

Israel's attorney-general Micha Lindenstrauss is urged to launch a criminal inquiry into allegations the PM Ehud Olmert, arranged business opportunities for friends while in a previous cabinet post. Micha Lindenstrauss, the state comptroller, said there was a possible conflict of interest dating from when Olmert served as trade and industry minister. The prime minister is already being investigated for alleged misconduct during the privatisation of Bank Leumi when he was finance minister in 2005. Olmert has previously clashed with the comptroller and his office said he had "lost faith" in him. "We have no doubt that this 'affair', like all the other 'affairs' which were looked into by the state comptroller and ended in nothing, will blow away like foam on the surface of water". Next week, Olmert faces potentially the biggest challenge to his leadership with the publication of a report into the government's handling of last summer's war against the Lebanese Hizbullah. There is widespread public disaffection with politicians over a recent string of corruption and sex scandals. It has also emerged that an Israeli-Arab leader is suspected of aiding Israel's enemies during the war against Hizbullah. An Israeli court partially lifted a ban on revealing details of the case and a police document showed that Azmi Bishara, who has quit the Israeli parliament, was suspected of helping an unspecified enemy with information and of violating money-laundering laws. Bishara told al-Jazeera he had not had any direct contact with Hizbullah nor received any money from the group. The head of the anti-Zionist Balad party quit his seat on Apr 22 at the Israeli embassy in Cairo and said he would stay abroad because of a "racist" climate in Israel. His resignation meant he lost his immunity from criminal prosecution and could be arrested if he returned to Israel. Balad has three seats in the 120-seat Knesset and Bishara, a Christian, is popular with Arabs in Israel and the occupied territories. Arabs account for 20% of Israel's citizens and complain of discrimination. Meanwhile, Olmert has ruled out a large-scale offensive in the Gaza Strip after Hamas rocket attacks on Israel resumed on Apr 24. In an emergency meeting with security chiefs, Olmert authorised "pinpoint" operations to halt the fire, it was reported. Rightwing Israeli politicians called for a harder response. The military wing of Hamas said it launched the barrage after nine Palestinians were killed last weekend by Israeli military operations. A shaky ceasefire has been in place in Gaza since November.