The prosecution indicted Olmert and 17 others, including the former mayor of Jerusalem Lupolianski [EPA]

Ehud Olmert, the former Israeli prime minister, has been indicted on corruption charges in the so-called Holyland case.

Olmert was accused on Thursday of taking bribes to promote construction of housing projects while he was the mayor of Jerusalem, a position he held before becoming prime minister in 2006.

In one of the largest corruption scandals in Israel's history, the prosecution announced indictments against 18 people, including the former prime minister, and a former Jerusalem mayor, Uri Lupolianski.

The case, which first erupted two years ago, investigates millions of dollars in bribes paid between 1999 and 2008 by the Holyland developing company, through intermediaries, to senior officials in Jerusalem.

Olmert has repeatedly denied that he intervened in anway to expedite the project, despite publicly supporting it.

Recently, he lashed out against the state witness, whose testimony is central to the case, calling him a liar, Haaretz reported.

"The state witness in the Holyland case is an abominable liar, but instead of putting him in jail, you're paying him and bribing him," Olmert told investigators during interrogation.

"The only one paying bribes in this project is the atate of Israel."

Olmert has also pleaded not guilty in separate proceedings that began in 2009 over allegations he took cash for favours and double-billed charities for airfare to attend overseas fund-raisers while serving as a cabinet minister and mayor.

Source: Agencies