With U.S. President Bush set to arrive in Israel next week, Al-Jazeera reports that Olmert plans to step down. Olmert's office denies.

Al-Jazeera, the international Arabic-language television news channel, reported Wednesday that Prime Minister Ehud Olmert is likely to suspend himself next week, in light of the police investigation against him. The media outlet added that he will be replaced by Foreign Minister Tzipi Livni until new elections are called. 

Staffers in Olmert's office flatly denied the report. U.S. President George W. Bush is scheduled to arrive in Israel next week in honor of Israel's 60th birthday commemorations, adding extra complications to the picture.

New Developments
Political analyst Yoav Yitzchak reports on his Hebrew-language NFC news site that Olmert is scheduled to be interrogated yet again by police next week on suspicion of accepting a bribe, breach of trust, and related charges.

The State Prosecution is to convene again this afternoon on the case, and is considering relaxing the gag order on the investigation, at least partially.

Meanwhile, the Jerusalem District Court has not yet decided whether to allow a key figure in the investigation to give testimony before an indictment is even handed down. The man, a foreign national, was apparently named in yesterday's New York Post report, but his name is forbidden for publication in Israel. He is currently visiting Israel and is cooperating with police, but could leave at a moment's notice.  The Court is to announce its decision only after Independence Day, which occurs tomorrow (Thursday).

Netanyahu Winks Both Ways
The latest scandal - the sixth police investigation against Olmert since he took office in early 2006 - is likely to lead to new elections, many politicians and analysts agree. The current favorite to win new elections is the Likud's Binyamin Netanyahu, who recently said that any agreement with the PA made by Olmert before he leaves office "is no more than a cynical invalid deal." 

Speaking with the Makor Rishon weekly last month, Netanyahu implied he would not honor such an agreement: "They [Olmert's Kadima party] can't force upon the public, in a cynical and manipulative manner, something the public is not interested in.”

In the same interview, Netanyahu - viewed on the left as a "right-wing extremist" - said he regrets not having established a national unity government with Shimon Peres after beating him in the 1996 elections.  "I have since learned to appreciate Shimon Peres on a personal level in a different way than I did back then,” Netanyahu said. “Today I think that we should have established a unity government, especially in light of the awful polarization that resulted from the assassination of Prime Minister Yitzchak Rabin.”