Following the police lead, Attorney-General Menahem Mazuz on Monday closed the case against former Prime Minister Ehud Olmert over alleged irregularities in his purchase of a home on Jerusalem's Rehov Cremieux, due to insufficient evidence, the Justice Ministry announced.

Olmert had been under investigation for purchasing the apartment in the capital's German Colony neighborhood from its builder, the Alumot MG Engineering Corporation, for hundreds of thousands of dollars less than the market price, while serving as acting prime minister in 2004.

In exchange, Olmert allegedly shortened bureaucratic processes within the Jerusalem Municipality for the Alumot Corporation, allowing Alumot to increase it building rights despite severe construction restrictions imposed on the structure because it was classified as a preserved building.

In March, police announced that insufficient evidence had been found to bring criminal charges against Olmert over alleged irregularities in the purchase of the Cremieux home.

"No evidence has been found to show that Olmert shortened processes... in the municipality," the police said in a statement. The chief of Israel Police Investigations, Cmdr. Yoav Saglovitch, adopted the National Fraud Unit's conclusions, the statement added.

Mazuz has already announced his intention to indict the prime minister in three separate affairs - the 'Investment Center' case, the 'cash envelopes case' and the 'Rishon Tours' case - pending hearings. Last Thursday, state prosecutors announced their decision to indict Olmert's former external affairs assistant Rachel Rizby-Raz in the Rishon Tours affair.

In December 2008, the state prosecution closed the file against Olmert in the Bank Leumi affair, in which Olmert was suspected of having intervened in the sale of part of the government's shares in the bank on behalf of a potential buyer.