Testimony challenged

Talansky has said that his court appearance will not have any real significance on the case against Olmert.

"I'll tell the story; it won't be dramatic and everyone will pick up the papers and say 'Why did we waste our time with this guy Talansky'?" he said on Tuesday.

The Israeli daily newspaper Haaretz said Olmert's lawyers will try to show that Talansky has changed his version of the same events when interviewed by police.

Amir Dan, a spokesman for Olmert, said on Wednesday that he hoped Talansky would give a reasonable testimony.

"Our only expectation from tomorrow is that he will tell the truth," Dan said on Wednesday.

The allegations against Olmert have led to calls for him to resign, including from among the ruling coalition.

Fragile coalition

After Talansky’s first court appearance, Ehud Barak, Labour party leader and defence minister and a key ally in the coalition with Olmert's Kadima party, threatened to leave Olmert's government if he did not step down.

Without Labour’s support, Olmert's coalition would not have the required 61 seats for a majority in the 120-member parliament.

But neither Kadima nor Labour want early elections because the Likud opposition leads opinion polls.

Olmert made a deal last month to hold a party leadership contest in mid-September, saving the coalition for now.

The Talansky affair continues as a new investigation has begun into reimbursement claims filed by Olmert when he was mayor of Jerusalem and minister of trade.

It is alleged that he billed private organisations and the state for the same airline tickets.

Olmert's former secretary has also been questioned this week over allegations that Olmert received a discount on the price of a Jerusalem apartment in exchange for using his influence to the benefit of a property developer.