JERUSALEM (AFP) - Israeli Prime Minister Ehud Olmert's lawyers said on Friday they have discredited claims by a US businessman that he gave Olmert thousands of dollars in cash to finance election campaigns and an expensive lifestyle.

The Jerusalem court had earlier rejected a request by a visibly tired and seemingly exasperated Morris Talansky, 75, to cut short his five-day cross-examination by Olmert's legal team.

"I simply don't have the energy... to stay more than Sunday. My wife, my life and business is absolutely in shambles because of this. This has just worn me out... I can't do it any more," he pleaded on day two of the questioning.

In a case that could bring about Olmert's downfall, the American testified in May that he had given Olmert some 150,000 dollars during the 13 years before he became premier in 2006, much of it stuffed into envelopes.

Talansky described Olmert as someone with a taste for first-class hotels and luxury items.

Olmert acknowledges having received campaign funds from Talansky, but has denied any wrongdoing.

Lawyer Eli Zohar focused on Talansky's claim in May that he had handed Olmert cash and cheques in envelopes, after the US businessman told the court on Friday that he had given Olmert only cash.

After Zohar accused him of lying several times, Talansky admitted sometimes contradicting himself but insisted that the general picture was true.

"All the horrible impressions that were created from this case I think, I suspect... are dispelled and damaged," Zohar said. "His (Talansky's) entire version, in terms of his reliability, has fallen today."

Navot Tel-Zur, also representing Olmert, said that "the heart of the version about ongoing raising of contributions over years in cash, has collapsed."

"What has been revealed today, as soon as the documents were shown that the same witness raised funds for all the campaigns in cheques and even when the money was given in cash, it was recorded," Tel-Zur said.

Talansky's lawyer Jackie Chen said after the hearing that despite the discrepencies, Talansky's version stood firm over the basic facts.

"Is the heart of his testimony correct? Did he come and tell a true story about the contributions and the support over the years? Yes of course," Chen told reporters.

State prosecutor Moshe Lador criticised the Olmert team for pressing Talansky on financial dealings that had nothing to do with the premier.

These included various personal loans that he had made and an unsuccessful attempt to get the court to order that he turn over notes related to them.

A new probe emerged last week over whether Olmert illegally billed multiple private organisations and the state for the same airline tickets when he was Jerusalem mayor and trade minister.

On a third front, there are allegations Olmert received a hefty discount in buying a Jerusalem apartment in exchange for using his influence to get a developer permission to build on a historic site.

Olmert has denied all the allegations against him.

Talansky's court appearance brought threats from Olmert's key coalition partner, the Labour party, to quit government if the premier did not step down.

Without Labour, the coalition would not have the required 61 seats for a majority in the 120-member parliament.

But neither Olmert's Kadima party nor Labour wants early elections because both are trailing the right-wing opposition Likud party in opinion polls.

Olmert was able to save the coalition last month by cutting a deal to hold a party leadership poll in mid-September.

Outside Israel, many fear Olmert's deepening political troubles could scupper slow-moving Middle East peace talks relaunched in November and aimed at resolving the decades-old conflict by the end of the year.

LIKE IT?  LET OTHERS KNOW