The Attorney General's office has ordered police to launch a criminal investigation into Prime Minister Ehud Olmert's purchase of a Jerusalem home, the Justice Ministry said Monday.
Israel's state comptroller, a government watchdog, has already investigated allegations that Olmert bought the house at a price significantly below market value, opening suspicions of fraud and bribery.
Olmert declared his innocence and insisted the price he paid was fair.
"We are absolutely convinced of the integrity of the Olmert family's purchase of the house," the statement said. "This investigation is uncalled for."
He promised to "cooperate fully" with the investigation.
If Olmert were indicted, he would have to resign. But such a development would be many steps down the road.
Olmert has been dogged by corruption allegations throughout his long political career but has never been convicted. He has consistently denied any wrongdoing.
The comptroller concluded that Olmert paid $325,000 below market value for the house.
"We are sure the investigation will clearly show that the purchase of the apartment by the Olmert family was made honestly, ethically and for an appropriate price," Olmert said in his statement.