Former Israeli Prime Minister Ehud Olmert is found guilty of breach of trust in a case that drove him from office in 2009. He still faces a bribery trial.

JERUSALEM — An Israeli court on Tuesday cleared former Prime Minister Ehud Olmert of the most serious corruption charges against him, including fraud, concealing cash gifts and double billing, but convicted him on a lesser count of breach of trust.

The split decision capped a five-year corruption inquiry that drove Olmert from office in 2009 and helped usher in the right-wing government of Prime Minister Benjamin Netanyahu.

It is not the end of Olmert´s legal problems. He still faces a bribery trial involving a controversial Jerusalem real estate development built while he was mayor of the city.

However, Tuesday´s verdict was widely seen as a significant vindication of the former Kadima party chairman, who had always insisted he was the innocent victim of a political witch hunt and that any improprieties or illegal activities were either fabricated or the result of mismanagement and disorganization in his office.

"I never defrauded anyone," an emotional Olmert told reporters outside the Jerusalem courtroom. "There was no corruption."

Nevertheless Olmert, 66, becomes the highest-ranking political figure in Israel´s history to be convicted of criminal activity.

Sentencing will be announced in September. Olmert still could face three years in prison for the breach-of-trust conviction, legal experts said, though his attorneys predicted that the former leader would avoid any jail time.

His case is one of a several corruption and misconduct inquiries that have shattered Israelis´ faith in their government leaders in recent years.

Last year, former Israeli President Moshe Katsav was convicted of rape and is serving a seven-year jail sentence. Foreign Minister Avigdor Lieberman is facing possible indictment over allegations of bribery and influence peddling.

Michael Partem, an attorney who campaigns against corruption, said neither side in the Olmert case should be celebrating the court´s decision.

"It´s not a victory for anybody," said Partem, vice chairman of the Jerusalem-based watchdog group Movement for Quality Government in Israel.

He predicted the case would further erode Israelis´ confidence in government institutions.

"Even before this case, Israelis has a very jaded view of their elected officials."

But Partem said he hoped prosecutors and courts would remain vigilant and aggressive in tackling government corruption, even as some Olmert supporters advocated firing or reining in the state´s prosecutor in light of the acquittal on the most serious charges in the case.

The original 61-page indictment against Olmert accused him accepting cash-stuffed envelopes from American businessman Morris Talansky, double billing for travel expenses abroad and steering government contracts and grants to supporters. The allegations, involving several hundred thousand dollars, centered on Olmert´s terms as Jerusalem mayor and trade minister, but they surfaced after he had been elected prime minister in 2006.

He could have faced five years in prison if convicted of the more serious charges.

In the end, the court ruled that Olmert was guilty only of trying to grant favors to a friend and former law associate while serving as Israel´s trade minister, which the court ruled was a conflict of interest. Judges said there was insufficient evidence to convict on the other charges.

Some believe the prosecution of Olmert may have changed the face of the Israeli-Palestinian conflict because his government was involved in peace talks. Olmert has since said that he had offered to make significant concessions toward creating a Palestinian state. Talks collapsed at the end of 2008 as Olmert´s administration began to crumble and never fully resumed under Netanyahu.

Palestinian leaders have said that a deal was not as close as Olmert has indicated. But the former prime minister hinted Tuesday that the corruption case against him may have changed the course of history.

"The far-reaching implications of the decision to put me on trial, both inside and outside of Israel, cannot be overlooked," he said. (Copyright © 2012 Los Angeles Times 07/11/12)