Former Israeli Prime Minister Ehud Olmert is a prime suspect in a large corruption scandal, law enforcement sources have told the BBC.
Mr Olmert returned to Israel from a holiday in Europe on Thursday after police asked he make himself available for questioning. He denies involvement.
Jerusalem officials are alleged to have taken bribes to advance a property development while Mr Olmert was mayor.
His successor as mayor was arrested on Wednesday over the case.
A judiciary spokesman said Uri Lupolianski was suspected of receiving bribes, money laundering, fraud, breach of trust, tax avoidance and conspiracy, in connection with the Holyland property development.
The controversial circle of high-rise luxury apartment blocks in West Jerusalem is regarded by many Jerusalem residents as an eyesore.
Last week, Mr Olmert's former lawyer, Uri Messer, was also arrested in connection with the affair.
According to Israeli police, during his time as deputy mayor under Mr Olmert, from 1993 to 2003, and later as mayor, Mr Lupolianski received more than 3m Israeli shekels ($810,000) in bribes from the developers in return for helping to advance the project by rejecting hundreds of objections.
Mr Lupolianski rejected the allegations, telling Channel 10 news: "This was 20 years ago. I don't know why everyone suddenly remembers now. A deputy mayor has no responsibility - it's merely a title."
Police say their serious crime unit has in recent weeks been investigating a "vast affair", of which the Holyland scandal is part.
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