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Prime Minister Ehud Olmert, embroiled in a number of corruption investigations, submitted his resignation last night to President Shimon Peres on the heels of last week's Kadima primary, which saw Foreign Minister Tzipi Livni emerge as the party's new leader.

In private conversations yesterday, Livni said that if Labor Party leader Ehud Barak agrees to join a government under her leadership, he will be made "a full partner." She is expected to be handed the task of forming a new government by President Peres today.

Livni told associates that despite the sometimes strained relations with the Labor leader in the past, she believes they should set aside their differences for the sake of the country. "After all, Barak is someone who cares about the nation's welfare," one associate quoted her as saying.

"You must have had a hard day," Peres told Olmert upon his arrival at the President's Residence, as they embraced. The outgoing prime minister responded that he actually felt just fine.

Olmert submitted the terse, two-sentence resignation letter to the president, then read it aloud: "Mr. President, in accordance with the instructions of Article 19 of the Basic Law: The Government, after informing the government that I had planned to do so, I hereby submit to you my resignation from the position of prime minister."

Olmert and Peres conversed for several minutes, then the prime minister left the residence.

Immediately thereafter, Peres read a statement to the assembled media. "I respect the dignified manner in which [Olmert] is transferring authority," he said. "This is not an easy decision, and I am sure it was not a simple thing for him to do."

Peres also thanked the outgoing prime minister "for his service to the nation and state during many years of public activity, as mayor of Jerusalem, government minister and prime minister."

"Israel's security and the well-being of its citizens stood at the center of the prime minister's activity," Peres said.

The president then spoke of his intention to begin meeting immediately with the heads of various Knesset factions in order to set a date for forming a new government.

Peres and Olmert were expected to begin formulating a timetable for Olmert's gradual departure from office, but that process may be delayed as the president is leaving late today for New York, where he will attend the United Nations General Assembly.

"Israel faces serious, complex challenges to its security, economy and society. All of these demand continuity of leadership," Peres said.

"Israel is a strong, democratic country, and the replacement of prime ministers will not compromise its strength, its determination to protect its citizens or its pursuit of peace," he added.

Olmert made the final decision to tender his resignation to Peres only yesterday morning, ahead of the weekly cabinet meeting.

The outgoing prime minister told ministers that after his resignation, he would do everything possible to help Livni assemble a new government.

After the meeting, Olmert continued with his usual schedule of appointments. He held an hour-long meeting with Defense Minister Ehud Barak and two additional security briefings.

At 6 P.M., he arrived at Livni's office for a meeting which Olmert staffers described as "excellent." He then traveled to the President's Residence to hand in his resignation and spent the evening with his family at home.

Although Livni is now head of Kadima, she does not automatically become prime minister: Peres has to first appoint her to put together a governing coalition, which is expected to do. Livni will then have six weeks to form a new government. Should she fail, new elections will be called for early 2009, a year and a half ahead of schedule.

Olmert's associates said that he intends to serve as head of a caretaker government until an alternative government is formed or elections are held. The sources said that as a caretaker prime minister, Olmert intends to continue pursuing negotiations with the Palestinian Authority. Should a peace deal be drafted, he would submit its terms for the review of the Knesset and cabinet.