Jerusalem:  Israeli Prime Minister Ehud Olmert and Palestinian President Mahmoud Abbas sparred today over Israeli construction in east Jerusalem, deepening the discord surrounding Olmert as he faces mounting calls for his ouster amid a growing corruption scandal.

Olmert is up against the toughest test of his political career, following hours of explosive testimony against him by the key witness in a corruption probe. The witness contention that Olmert took hundreds of thousands of dollars in cash from American Jewish donors, including large sums to sustain a lavish lifestyle, has provoked unprecedented public censure and open rebellion by former political allies.

The backlash has led to efforts within his Kadima Party and coalition partner Labour to unseat him, which in turn could derail already faltering Mideast peace negotiations.

Defence Minister Ehud Barak, Labour's head, disclosed today that he has prepared legislation to dissolve parliament and force the country to hold elections ahead of their November 2010 schedule.

Amid the political tumult, Olmert has been trying to project a "business-as-usual" image, including his meeting with Abbas before setting off late today for Washington.

One gesture the Palestinians have unsuccessfully sought is a halt to Israeli construction in east Jerusalem and the West Bank, areas they hope will form part of their future state.

Abbas, who has denounced the plans as a major obstacle to peacemaking, expressed concern about the plans in his talks with Olmert, said the Israeli leader's spokesman, Mark Regev.

But Olmert told him that "Jewish neighbourhoods in east Jerusalem will stay in Israel's hands," he said.

Source : PTI