Occupied Jerusalem: The key witness in the new corruption case against Israeli Prime Minister Ehud Olmert testified in court on Tuesday.

Olmert is facing charges of illegally taking money from witness and US millionaire financier, Morris Talansky, who testified on behalf of the prosecution.

Talansky told the court he gave Olmert cash in envelopes but did not expect favours in return. "I didn't expect anything from the prime minister, and I didn't receive anything," Talansky said.

Talansky said he handed over sums, ranging from $5,000 to $15,000 at a time, in Israel or during visits Olmert made to New York before becoming prime minister in 2006.

"I asked him why I couldn't write a check and he said it's because of the way the money is channelled. So I gave him cash, out of my own money. I would cash the (contribution) checks and give cash," Talansky said.

Police first questioned Olmert on the issue three weeks ago, and again on Friday.

Olmert has denied any wrongdoing and said he would resign if an indictment is filed against him.