Tel Aviv  - The testimony of a key witness in corruption allegations surrounding Israeli Prime Minister Ehud Olmert has seriously lowered his public standing, an opinion poll published Wednesday has found.

The survey in the Ha'aretz daily showed that only 14 per cent of the public believed the prime minister's version of events, that the 150,000 dollars in cash he received from US businessman Morris Talansky was used for election expenses only.

Talansky, who spent seven hours testifying Tuesday in a pre-trial court appearance, said he also underwrote vacations for Olmert and advanced him loans which were never paid back.

Talansky testified Tuesday on behalf of the prosecution, who had had pressed for the early deposition, because they fear Talansky, as a US national, may not return to Israel if and when a trial begins.

The latest scandal threatens to end Olmert's political career, which extends back to the early 1970s, and could adversely affect peace negotiations with the Palestinians and with Syria.

Defence Minister and Labour Party leader Ehud Barak was closeted with party leaders Wednesday morning, and speculation in the Israeli media said he would either demand Olmert suspend himself, in light of the latest scandal, or would demand new elections be held. (dpa)