JERUSALEM, Sept 24: Israel’s attorney-general ordered police on Monday to open a criminal investigation into Prime Minister Ehud Olmert’s purchase of a home in Jerusalem.

A complaint filed by an investigative journalist alleg-ed Mr Olmert received a “significant discount” on the price in return for using his influence in Jerusalem city hall to speed up building permits for the contractor who sold him the home.

Mr Olmert denied any wrongdoing in the case, one of several corruption probes that have plagued the Israeli leader since he took office last year and raised questions about his political future as he pursues peace talks with the Palestinians.

“The attorney-general decided to order police to open a criminal investigation into the Cremieux affair,” the justice ministry said, referring to the street where Mr Olmert bought the house for $1.2 million in 2004.Israeli media reports said $320,000 was knocked off the purchase price.

Mr Olmert served as mayor of Jerusalem from 1993 to 2003.

Israel’s main government watchdog, the state comptroller’s office, first investigated the complaint and gave its findings to Attorney-General Menachem Mazuz.

“This is a needless investigation,” said a statement issued by the Prime Minister’s Office after Mazuz ordered the police probe. The price Olmert paid for the home, the statement said, was in line with real estate market conditions at the time.

Police are already investigating Olmert’s role, as finance minister, in the 2005 privatisation of Benk Leumi, Israel’s second biggest commercial bank.

Suspicions in that case focus on whether Olmert tried to tailor the sale offer to give preference to a friend, who ultimately never bid on the bank.

Mazuz is also considering whether to instruct police to investigate whether Olmert, as industry and trade minister in 2003, appointed cronies to a government-funded business authority and helped secure official funding for a factory represented by his former law partner. —Reuters