The Israeli Attorney General's office has ordered police to launch a criminal investigation into Prime Minister Ehud Olmert's purchase of a Jerusalem home, the Justice Ministry said Monday.
Israel's state comptroller, a government watchdog, has already investigated allegations that Olmert bought the house at a price significantly below market value, opening suspicions of fraud and bribery.
If indicted, he would be forced to step down, reports CBS News correspondent Robert Berger.
Olmert declared his innocence and insisted the price he paid was fair.
"We are absolutely convinced of the integrity of the Olmert family's purchase of the house," the statement said. "This investigation is uncalled for."
He promised to "cooperate fully" with the investigation.
In other developments:
Olmert has been dogged by corruption allegations throughout his long political career but has never been convicted. He has consistently denied any wrongdoing.
The comptroller concluded that Olmert paid $325,000 below market value for the house.
"We are sure the investigation will clearly show that the purchase of the apartment by the Olmert family was made honestly, ethically and for an appropriate price," Olmert said in his statement.
The Temple Mount site, where the stones from the quarry were used, is at the heart of the Israeli-Palestinian conflict, with both sides claiming the area. Israel captured Jerusalem's Old City from Jordan during the 1967 Mideast war. While retaining security responsibility for the site, Israel allows Muslims to handle day-to-day responsibilities there.
Today, the compound Herod renovated houses the most explosive religious site in the Holy Land, known as the Temple Mount to Jews and the Noble Sanctuary to Muslims.
"This is the first time stones which were used to build the Temple Mount walls were found," said Yuval Baruch, an archaeologist with the Israeli Antiquities Authority involved in the dig. Quarries mined for the massive stones, each weighing more than 20 tons, eluded researchers until now, he said Sunday.
Baruch said coins and pottery found in the quarry confirm the stone was used during the period of Herod's expansion of the Temple Mount in 19 B.C.
But researchers said the strongest piece of evidence was found wedged into one of the massive cuts in the white limestone - an iron stake used to split the stone. The tool was apparently improperly used, accidentally lodged in the stone and forgotten.
"It stayed here for 2,000 years for us to find because a worker didn't know what to do with it," said archaeologist Ehud Nesher, also of the Antiquities Authority.
Nesher said the large outlines of the stone cuts indicated the site was a massive public project worked by hundreds of slaves. "Nothing private could have done this," Nesher said. "This is Herod's, this is a sign of him."
Herod was the Jewish proxy ruler of the Holy Land under imperial Roman occupation from 37 B.C. Herod's most famous construction project was the renovation of the Temple, replacing a smaller structure that itself replaced the First Temple, destroyed by the Babylonians in 586 B.C.
Stephen Pfann, president of the University of The Holy Land and an expert in the Second Temple period, said the discovery was encouraging.
"It would be very difficult to find any other buildings in any other period that would warrant stones of that size," said Pfann, who was not involved in the dig. He said further testing of the rock is necessary to confirm the findings.
Atop the adjacent compound, where Jews believe the Temple once stood, now stand two of the holiest sites in Islam, the al-Aqsa Mosque and the gold-capped Dome of the Rock.