Israeli police are questioning Prime Minister Ehud Olmert for a fifth time over corruption allegations.
Mr Olmert denies claims that he double billed charities and state bodies for overseas trips and improperly accepted donations from a US businessman.
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He said he would not stand in his party's leadership elections, paving the way for a successor to take over.
But if the new leader of the Kadima party is unable to form a coalition government after the September elections, Mr Olmert could remain as caretaker prime minister until a general election is held.
In all Mr Olmert has faced six corruption investigations relating to before he became prime minister, although no charges have been filed in any of them.
In the most recent case, he is accused of submitting duplicate claims for travel expenses for overseas travel and using the money to fund family trips abroad.
That followed claims by a US businessman, Morris Talansky, that he gave Mr Olmert cash-stuffed envelopes.
Mr Talansky has said the money may have been used on luxury items, but Mr Olmert has said he only received legitimate funds for his campaigns for re-election as mayor of Jerusalem and for the leadership of the Likud party.
He has said he will resign if charged.
In the succession race for the leadership of the centrist Kadima party, Foreign Minister Tzipi Livni leads Transport Minister Shaul Mofaz in the polls.
Public Security Minister Avi Dichter and Interior Minister Meir Sheetrit are also seen as potential successors.
But the leader of the right-wing Likud party, Binyamin Netanyahu, has been performing well in polls for a potential general election.
The political uncertainty in Israel has cast a shadow over a faltering US-backed peace process with the Palestinians and indirect talks with Syria.
(BBC)
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