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Scandal-plagued Israeli Prime Minister Ehud Olmert announced on Wednesday that he would quit politics and resign from office this fall rather than compete for the leadership of his own party, throwing the peace processes with Syria and the Palestinians into turmoil and setting the stage for a high-stakes political battle over who will succeed him.

In a brief statement to a hastily assembled press conference at his Jerusalem residence, Mr. Olmert said he would step down as soon as the centrist Kadima party picks a new leader this September. Lagging badly in opinion polls and targeted by four separate corruption investigations, he lashed out at the “ceaseless attacks of righteous people” and said he would prove his innocence after leaving office midway through his four-year term.

“When a new [Kadima party] chairman is chosen, I will resign as prime minister to permit them to put together a new government swiftly and effectively,” Mr. Olmert said. Looking tired and angry, he read from a prepared text and then left the podium without taking questions.

The announcement could eventually trigger a general election, and is expected to at least temporarily stall peace negotiations that Mr. Olmert was overseeing with the Palestinian Authority and Syria. Israeli media reported on Wednesday that Mr. Olmert called U.S. President George W. Bush before making his statement.

“Unfortunately [the peace processes] are frozen, at least for a little while,” said Yoram Peri, who advised former Israeli prime minister Yitzhak Rabin during the Oslo peace process in the early 1990s. Many of Mr. Olmert's political troubles, he said, likely stemmed from his efforts to promote unpopular negotiations with both Palestinian president Mahmoud Abbas and Syrian President Bashar Assad. “Many people were against Olmert not because of his crimes and his corruption, but because of the peace process.”

The front-runners to replace Mr. Olmert are Foreign Minister Tzipi Livni, who is leading the peace talks with the Palestinians, and Transportation Minister Shaul Mofaz, a hawkish former army chief-of-staff. The first round of the Kadima leadership vote is set for Sept. 17, with a second ballot scheduled for the following week if no one gains at least 40 per cent of votes.

Ms. Livni is expected to campaign on her clean reputation and position herself as the true successor to Ariel Sharon, the former prime minister who founded Kadima in 2005 shortly before collapsing into a coma. Mr. Mofaz is likely to emphasize his extensive background dealing with defence and security matters, while highlighting Ms. Livni's relative lack of experience in those fields.

Although opinion polls show Ms. Livni is far more popular with the general public, Mr. Mofaz has wide support among the 30,000 registered Kadima members who will be allowed to vote in the leadership race. A recent poll showed the two to be in almost a dead heat among party members, and revealed that Mr. Olmert would have finished no better than a humiliating third had he decided to run.

Two other candidates, Public Security Minister Avi Dichter and Interior Minister Meir Sheetrit, are also expected to join the race.

Mr. Olmert's resignation will automatically trigger the resignation of the entire government. President Shimon Peres will then ask someone – likely the new Kadima leader, since the party holds a plurality in the fractured Israeli parliament, to form the next government. They will then have 28 days to cobble together a coalition capable of forming a majority in the 120-seat parliament or Knesset.

If they fail, Mr. Peres can turn to someone else, or call an election. Mr. Olmert will likely remain in office until the process is complete.

Mr. Olmert's current Kadima-led coalition includes five parties, the second-biggest of which is the left-wing Labour Party. Labour chairman Ehud Barak will likely embrace the new Kadima leader in order to avoid fresh elections, since opinion polls suggest the right-wing Likud, led by former prime minister Benjamin Netanyahu, would win such a vote.

In recent days, Mr. Olmert has seemed increasingly grumpy and dissatisfied with political life. Earlier this week, Mr. Olmert acknowledged there was no chance for a comprehensive peace deal with the Palestinian Authority this year, effectively conceding defeat in what he had hoped would be a legacy-defining effort to finally make peace with Israel's neighbours.

Domestic politics were just as gruelling. During a Knesset session just hours before he made his announcement, Mr. Olmert became enraged by proceedings, at one point grumbling aloud, “this is terrible, you can't run a country this way.” He called Israel “a nation of grumblers who complain in almost every situation.”

“I think the Knesset today played a role [in Mr. Olmert's decision to quit]. I think he realized … that it wasn't just himself, that the government and the cabinet weren't functioning,” said Mr. Peri, the former Rabin adviser who now is a professor of communications at Tel Aviv University.

Mr. Peri said one casualty of Mr. Olmert's decision will likely be the peace negotiations with Syria and the Palestinian Authority – something that will delight his political opponents.

When Mr. Olmert does step down, it will mark the end of just over two tumultuous years in office and the beginning of legal battles that could last at least as long. The most serious of the police investigations launched against Mr. Olmert involves allegations that he accepted $150,000 in cash-stuffed envelopes from American Jewish businessman Morris Talansky between 1993 and 2006, a period during which he served first as mayor of Jerusalem, and then as a cabinet minister in the government of Ariel Sharon.

Police are also investigating allegations that Mr. Olmert double-billed for numerous government trips he took during the same time frame. Police say there is evidence that Mr. Olmert used the extra money to pay for family vacations.

Mr. Olmert, who has faced 18 police investigations during his career in politics, has always insisted he did nothing wrong in any of the cases against him. He promised on Wednesday that he would fight to clear his name after leaving office.

“I want to make it clear – I am proud to be a citizen of a country where the prime minister can be investigated like a regular citizen,” he said. “I will step aside properly in an honourable and responsible way, and afterward I will prove my innocence.”

In addition to the corruption accusations, the 62-year-old's reputation was badly tarnished by the lingering perception that he failed as a leader during the 2006 war in Lebanon. A government panel found that Israel had gone to war “hastily” after the militant Hezbollah movement kidnapped two soldiers – a decision that left more than 1,200 people dead in the month-long conflict, most of them Lebanese civilians. Thousands of Hezbollah rockets struck northern Israel, and hundreds of thousands of people on both sides were forced to flee their homes.

His political opponents were not kind in eulogizing the apparent end of his political career. “Olmert's tenure will be remembered as public bedlam and as a farce of a government,” Likud parliamentarian Reuven Rivlin said, adding that Mr. Olmert should have resigned months ago.

Mr. Olmert's rise to power was almost as sudden as his downfall was protracted. He was propelled to the post of acting prime minister in January, 2006, after Mr. Sharon suffered a massive stroke that has left him in a coma to this day.

Thrust into the leadership role after Ms. Livni stepped aside, Mr. Olmert led the newly created Kadima party – Mr. Sharon's brainchild – to a narrow victory in elections that spring.