Energy Minister Silvan Shalom, tipped as a possible presidential candidate, has been accused of sexual assault by a female former employee, Israeli media reported on Monday.
The alleged victim who worked for Shalom, a member of Prime Minister Benjamin Netanyahu's Likud party, has filed a complaint, the reports said.
Police told AFP they were "investigating accusations against a minister," without giving any further details.
Speaking anonymously to army radio, the former employee said Shalom had on one occasion in 1999 called her to deliver documents to a Jerusalem hotel room where he was staying, and she found him naked.
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Shalom, who was serving as science minister at the time, then forced her to perform oral sex on him, she said.
Shalom, now 55, has been expected to run in a June 14 presidential election as a possible successor to Shimon Peres, and he was about to announce his candidature, according to local media.
He appears to be immune from prosecution under an Israeli statute of limitations, since the incident dates back more than 10 years.
But police are keeping the investigation open, as more women are already coming forward with similar accusations against the minister, army radio said.
Gila Gamliel, a Likud MP close to Shalom, told the radio that the minister's entourage "rejected" the allegations, suggesting they were part of a smear campaign ahead of the election.