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CRAWFORD, Texas, May 8 (Reuters) - U.S. President George W. Bush will proceed with his trip to Israel next week to try to broker peace between the Israelis and Palestinians despite an admission by Israel's leader that he took cash from an American businessman, the White House said on Thursday.

Israeli Prime Minister Ehud Olmert admitted on Thursday that he took cash from an American businessman but refused to resign over a police investigation into hundreds of thousands of dollars of alleged bribes. He denied wrongdoing.

"This is a matter for the Israeli judicial system," White House spokesman Gordon Johndroe said in Texas where Bush was at his ranch preparing for his daughter's wedding.

"The president looks forward to traveling to the Middle East next week to continue to encourage the Israelis and Palestinians to work together for a two-state solution," he said. He confirmed that Bush would go ahead with his visit to Israel scheduled for May 14-15.

Bush and Olmert are due to meet on May 14 and will also attend festivities surrounding the 60th anniversary of Israel's founding. Bush will also visit close U.S. ally Saudi Arabia and Egypt.

The U.S. president has been pushing the two sides to reach a peace accord before he leaves office in January 2009 but his visit will likely be overshadowed by the questions facing Olmert.

In a brief address, Olmert said he had taken money from Morris Talansky, a New York-based financier also known as Moshe Talansky. But he insisted that these were simply donations to fund campaigns for re-election as mayor of Jerusalem and for the leadership of the Likud party. (Reporting by Jeremy Pelofsky; Editing by Eric Walsh)

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