Kiryat Malachi Mayor Moti Malka told reporters at Petah Tikva District Court, where he arrived to appeal an eight-day remand, that the "truth will come to light," showing he is innocent, The Jerusalem Post reported.
The court sent Malka back into custody for a week as police continue their investigation.
The mayor is suspected of repeatedly raping, sodomizing and sexually abusing the employee, allegedly in an apartment a contractor made available to him as a bribe.
The Post said police suspect on one occasion, Malka and his deputy, Yossi Sulimani, raped the woman.
Malka, his son and five municipality officers were arrested last Wednesday after an undercover investigation into alleged rape and widespread bribery.
Police also suspect Malka had taken a "sexual bribe" from a single mother in exchange for lowering her municipal land tax, the Post said.
Six months ago, former Israeli President President Moshe Katsav, also of Kiryat Malachi, was sent to prison for seven years after being convicted of raping an employee twice while he was minister of tourism and sexually abusing and harassing two others as president, The New York Times has reported.