Jerusalem - Israeli Prime Minsiter Ehud Olmert insisted late Wednesday night that he won't resign, the Jerusalem Post reported.

Olmert was facing down demands earlier in the day from Defence Minister Ehud Barak - the leader of Olmert's largest coalition partner, the Labour Party - that he step aside amidst a corruption investigation.

"I will continue to function as prime minister," Olmert was quoted as saying by the Jerusalem Post. "There are those who believe that every opening of an investigation requires a resignation. I don't think so, and I do not intend to resign."

Olmert was speaking to southern mayors in his first public comments after Barak's press conference, the Post reported.

Barak's challenge to Olmert threw the Israeli political establishment into a tailspin. Barack insisted Olmert remove himself from office or face early elections. (dpa)