JERUSALEM (AP) - Ehud Olmert's political opponents demanded his resignation Friday, saying new allegations that the Israeli prime minister illegally accepted hundreds of thousands of dollars from a U.S. citizen render him unfit for the country's top job.

Olmert said in a nationally television speech Thursday that he never took illegal campaign contributions but if indicted, he would resign.

But some Israeli lawmakers said the new investigation was reason enough for him to leave office. The investigation is the fifth opened into Olmert's activities since he took office in 2006.

Olmert's legal troubles are diverting his attention from running the country, and "a state like Israel, with an existential threat, needs a full-time prime minister," said Arieh Eldad of the hardline National Union party.

"We need a much better leader at this time, and Israel should go to general elections in order to replace him with a better government," Eldad said.

Eldad's call was echoed by other politicians from opposition parties and by a small number of lawmakers who belong to Olmert's governing coalition.

Shelly Yacimovich of the Labor Party, a junior partner in the government, said Labor "cannot remain in the same coalition with a prime minister tarnished by such deep corruption." Labor's departure, a possibility that still appears remote, would bring Olmert's government down.

According to police suspicions, Olmert accepted hundreds of thousands of dollars in illegal contributions from American Jewish businessman Morris "Moshe" Talansky before becoming prime minister. In his speech Thursday, Olmert denied the charges. He said a lawyer handled his finances and insisted everything was legal.

"I am looking all of you in the eye, and I say I never took bribes, I never took a penny for myself," Olmert said.

Yoel Hasson, a lawmaker from Olmert's party, said he accepted Olmert's version of events.

"You don't topple and replace governments or prime ministers because of allegations and investigations," Hasson said.

But Olmert also said he will not fight to stay in office if he is formally charged.

"Even though the law does not require me to do this, I will resign from my job if the attorney general decides to issue an indictment against me," he said.

Olmert said Talansky had made contributions to him for two Jerusalem mayoral campaigns, one campaign for chairman of the Likud Party and another to cover campaign debt retroactively.

Olmert's speech, and the court's decision to lift the gag order on the case that first came to light about a week ago, came as Israelis celebrated their nation's 60th anniversary.

Talansky's attorney, Jack Chen, declined a request Friday to interview his client and would not comment on the case.

Talansky told Channel Two on Thursday that he was in Israel visiting family for the Passover holiday when he was called in for questioning. He said he was "baffled" by the case and that he did nothing wrong.

Referring to his relationship with Olmert, he said, "We are very, very friendly and I used to meet him all the time at dinners in New York."

The allegations threaten to further weaken Olmert's hold on power and potentially torpedo formal peace talks with the Palestinians launched in November at a U.S.-hosted Mideast peace conference at Annapolis, Md.

The White House said the case would not alter President Bush's planned visit to Israel next week, calling the investigation "a matter for the Israeli judicial system."

But at one cafe in downtown Jerusalem, several patrons said Friday that Olmert should step down.

"I'll tell you the truth - when I see the newspapers and listen to the radio, it's not good, not good," said Avraham Fixler, a pub manager. "He should be a gentleman and go home."

Olmert was elected prime minister in 2006. He is a suspect in several corruption affairs involving real estate deals and questionable political appointments. He has been questioned several times in the past by police but has never been convicted.

Moshe Negbi, an Israeli legal expert, told Israel Radio that Olmert could get seven years in jail if convicted of taking bribes.