TEL AVIV, May 28 (RIA Novosti) - Israel's defense minister urged the country's prime minister, Ehud Olmert, to step down from office Wednesday after an American businessmen told an Israeli court that he had paid the premier around $150,000.

Ehud Barak said on national TV Wednesday that if Olmert did not step down, then his Labor Party would withdraw from the political coalition forcing early elections.

Morris Talansky testified in court Tuesday that he had given Olmert $150,000 over a 15 year period, which he said the premier had spent on luxury hotels and expensive gifts. Olmert admitted receiving money from the businessman, but said it was to fund his election campaign.

Olmert has denied corruption and said he will resign if he is found guilty.

Barak said he believed it was impossible for Olmert to run the government and "deal with his own personal affair."

"The prime minister needs to disconnect himself from the day-to-day management of the government," he said, adding that Olmert should either suspend himself from duties, take a vacation or resign.