A new and intensive criminal investigation into Prime Minister Ehud Olmert?s affairs has Israeli commentators questioning his political prospects at a crucial point in US-led peacemaking with the Palestinians.

Already the subject of a series of corruption investigations in which he has denied any wrongdoing, Olmert was questioned at short notice by police last week over fresh allegations barred from publication under a court gagging order. Several pundits who say they have knowledge of the case believe Olmert could face pressure to step down on the eve of a visit by US President George W. Bush to promote negotiations designed to yield an accord on Palestinian statehood by year?s end. ?The matter under investigation is serious, there can be no doubt about that. If it turns out that the allegations against Olmert are well-founded, he will have to resign his post, if not more than that,? wrote Nahum Barnea of Israel?s biggest-selling newspaper Yedioth Ahronoth. Olmert said on the day before he was staying in office and cooperating fully with the investigation. He dismissed media reports on the gravity of his legal woes as ?vicious rumours?. US Secretary of State Condoleezza Rice, who held talks with Olmert in Jerusalem to prepare for a Bush visit expected to begin on May 13, declined to comment on the police investigation, describing it as ?internal matters for Israel?.

But US officials have privately said they are taking this investigation seriously given its possible ramifications for a peace process that has already experienced significant setbacks.