The noose may be tightening around Israel's embattled prime minister in a corruption scandal, but he is pressing on. Robert Berger reports from the VOA bureau in Jerusalem.

Prime Minister Ehud Olmert is brushing off demands to resign after an American Jewish businessman said he gave him envelopes stuffed with cash to support a lavish lifestyle. Prosecutors suspect money laundering and bribery; but Mr. Olmert said he is innocent until proven guilty, and like other scandals that have dogged him, nothing would come of it.

Mr. Olmert's grip on power was put in doubt on Wednesday, when his defense minister, Ehud Barak, demanded that he step down over the corruption allegations. Barak threatened to pull his Labor Party out of the coalition government and force early elections if the Prime Minister does not comply.

But while Mr. Olmert may be down he is not out, says Jerusalem Post editor David Horovitz.

"He is a political fighter, and he is going to fight through this," Horovitz said. "Every day that he staves off the immediate threat will be a victory, and knowing Olmert as we do, this is what he is going to try to do."

While the corruption scandal is embarrassing and damaging, it is still not clear whether Mr. Olmert broke the law.

 "We have to think about first of all, 'Is it a criminal offense, is it against the law on the books or is it not?' And [despite] the circus we've seen in the media, it's a little early to indict him," attorney Haim Katz said.

Mr. Olmert says that if indicted he will resign. But a possible indictment is still months away, and until then, the Prime Minister appears determined to hang on to his job.