JERUSALEM (AFP) Israeli Defence Minister Ehud Barak warned on Thursday that his Labour party would join the opposition in voting to dissolve parliament if the Kadima party does not name a new prime minister.

"The way things are now, we will present a bill to dissolve parliament on June 25," Barak told journalists.

"The decision is in the camp of (Prime Minister) Ehud Olmert and his party," said Barak, whose Labour party is Kadima's main coalition ally.

He stressed that his party would be willing to remain in the coalition if Kadima names a replacement for Olmert, who is dogged by accusations of graft.

Likud, the main opposition party, already announced it would present a bill to dissolve parliament and pave the ground for snap elections.

Even members of Olmert's Kadima party have raised the possibility of early elections after billionaire US financier Morris Talansky testified before a Jerusalem court last month that he had given Olmert vast amounts of cash stuffed into envelopes.

Talansky said he had given at least 150,000 dollars in the 14 years before he became prime minister in 2006, some of which might have been used to fund Olmert's taste for luxury goods.

Olmert has denied any wrongdoing although he has acknowledged receiving campaign donations.

A recent opinion poll showed 70 percent of Israelis believed Olmert should step down, and 62 percent favoured early elections.

© 2008 Agence France-Presse