A Tel Aviv court on Monday found former premier Ehud Olmert guilty of bribery linked to a Jerusalem property development, in one of the worst corruption scandals in Israeli history.

At a lengthy hearing in Tel Aviv District Court presided over by Judge David Rosen, Olmert was convicted on two counts of bribery, making him the first former premier to be convicted of the offence.

The trial, which included 16 defendants and took place over two years, was linked to the construction of the massive Holyland residential complex when Olmert served as the city's mayor.

In 2010, Olmert was named the key suspect in the so-called Holyland affair on suspicion that he received hundreds of thousands of shekels for helping developers get the construction project past various legal and planning obstacles.

The towering construction project, which dominates the city's skyline, is seen as a major blot on the landscape and widely reviled as a symbol of high-level corruption.

"We're talking about corrupt and filthy practices," Judge Rosen said in the 700-page verdict which branded Olmert as a liar.

Olmert reportedly sat expressionless throughout the verdict as the judge spoke at length of a "corrupt political system which has decayed over the years... and in which hundreds of thousands of shekels were transferred to elected officials".

According to the verdict, excerpts of which were seen by AFP, Olmert personally received bribes to the tune of 560,000 shekels ($160,000/116,000 euros at the current exchange rate), most of which was given to his brother Yossi by a middleman who later turned state's witness.

"The state 's witness bought (Olmert's) 'services' at a price of 500,000 shekels which was transferred to him through his brother," it said of the main sum, saying the transfer involved eight post-dated cheques of between 50,000 and 80,000 shekels.

Rosen also said the 68-year-old had lied to the court in a bid to "blacken the name" of the state's witness in a verdict which found 13 of the 16 defendants guilty.

Olmert's spokesman Jacob Galanti vowed to appeal, the Haaretz news website reported.

"Possible jail sentence"

There has been no date set for the sentencing, although the court has ordered deliberations to begin on April 28 in a process which is likely to last several weeks, legal sources said.

Liat Ben Ari, one of the prosecuting lawyers, said it was "still too early" to say whether they would ask for the maximum sentence of seven years.

"Usually the punishment for bribery is prison. Obviously, we have to look at all the circumstances and the full verdict in order to reach a decision," she told public radio.

Commentators said it was possible Olmert could face a jail term.

"You are talking about a man who has already been convicted of corruption in a previous case at Jerusalem District Court," said Moshe HaNegbi, legal commentator for public radio.

"I don't see a situation, under these circumstances, where the prosecution does not ask for several years' jail time."

In July 2012, a Jerusalem court found Olmert guilty of breach of trust but cleared him on two more serious charges related to the alleged receipt of cash-stuffed envelopes and multiple billing for trips abroad.

He was fined $19,000 and given a suspended jail sentence for graft.

The Haifa-born politician was mayor of Jerusalem from 1993 to 2003, after which he served as a cabinet minister, holding the trade and industry portfolio as well as several others.

He became premier in 2006, leading the centre-right Kadima party into government, but resigned in September 2008 after police recommended that he be indicted in several graft cases.

The Movement for Quality Government in Israel told AFP it was the first time a former prime minister had been convicted of bribery in a verdict which offered some hope that Israel was beginning to tackle a political culture stained by corruption.

"From the point of view of quality of government in Israel and democratic institutions, this is an extremely important case," said vice-chairman Michael Partem.

"It has implications for the quality of government and the standards by which we hold politicians accountable and transparent."