Police recommended Thursday that prosecutors drop their investigation into whether Prime Minister Ehud Olmert illegally intervened in the government's sale of a bank, citing a lack of evidence, officials said.

The decision gave Olmert an important boost as he prepares to relaunch peace talks with the Palestinians. The threat of indictment has cast a cloud over him for months.

Police spokesman Micky Rosenfeld said police concluded there is insufficient evidence to indict him. Their conclusions were forwarded to the attorney general, who will make the final decision to indict.