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JERUSALEM (CNN) -- Israeli Prime Minister Ehud Olmert, dogged by allegations of corruption, formally announced his intention to resign Sunday at a Cabinet meeting.
"This was not an easy or simple decision," he said before the meeting.
It was not immediately clear when he will submit his official letter of resignation to President Shimon Peres.
However, Olmert will remain the prime minister of a transition government until a successor assumes power either by forming a new coalition in the current Knesset or through new general elections.
There are many possible scenarios that could play out in coming months.
Israeli President Shimon Peres is likely to call on Foreign Minister Tzipi Livni, who won by a narrow margin to lead the ruling Kadima party last week, to form a coalition.
The Labor Party, the largest of Kadima's partners in government, could pull out of the coalition, which could force early elections or force the government to take on new coalition partners.
If elections are called, former prime minister and Labor leader Ehud Barak could vie for the top spot, but polls have shown he may not have enough support.
Some observers think former Prime Minister Benjamin Netanyahu, head of the opposition Likud Party, is also a potential candidate for the office.
Whoever succeeds Olmert as prime minister will be handed a set of daunting challenges, including determining the fate of Israel's talks with the Palestinians, its indirect talks with Syria and its tough talk on Iran's nuclear aspirations.
If Livni replaces Olmert, she will be the second woman in Israel's history to serve as Prime Minister. Golda Meir served from 1969 to 1974.
Livni, a 50-year-old who entered the Knesset less than 10 years ago, owes her victory to her reputation for clean hands in a party that lost Olmert to allegations of graft.
She told reporters on Thursday that she intends "to bring together Kadima factions and to go on this new path together."
Livni is the chief Israeli negotiator with the Palestinian Authority as the two sides work toward a peace deal. She also refuses to be tied to the Bush administration's vision of a peace deal by the end of this year.
Meanwhile, police have recommended that Olmert be indicted on corruption charges.
Israeli authorities say Olmert, while serving as Jerusalem mayor and a government minister, asked various public organizations to cover the same expenses and pocketed the extra money.
In May, an American businessman testified that he gave cash-filled envelopes to Olmert, who denies any wrongdoing.
Olmert was Jerusalem's mayor from 1993 to 2003 and served in several cabinet posts from 2003 to 2006. He took over as prime minister after a 2006 stroke left then-premier Ariel Sharon in a coma from which he has never recovered.
"This was not an easy or simple decision," he said before the meeting.
It was not immediately clear when he will submit his official letter of resignation to President Shimon Peres.
However, Olmert will remain the prime minister of a transition government until a successor assumes power either by forming a new coalition in the current Knesset or through new general elections.
There are many possible scenarios that could play out in coming months.
Israeli President Shimon Peres is likely to call on Foreign Minister Tzipi Livni, who won by a narrow margin to lead the ruling Kadima party last week, to form a coalition.
The Labor Party, the largest of Kadima's partners in government, could pull out of the coalition, which could force early elections or force the government to take on new coalition partners.
If elections are called, former prime minister and Labor leader Ehud Barak could vie for the top spot, but polls have shown he may not have enough support.
Some observers think former Prime Minister Benjamin Netanyahu, head of the opposition Likud Party, is also a potential candidate for the office.
Whoever succeeds Olmert as prime minister will be handed a set of daunting challenges, including determining the fate of Israel's talks with the Palestinians, its indirect talks with Syria and its tough talk on Iran's nuclear aspirations.
If Livni replaces Olmert, she will be the second woman in Israel's history to serve as Prime Minister. Golda Meir served from 1969 to 1974.
Livni, a 50-year-old who entered the Knesset less than 10 years ago, owes her victory to her reputation for clean hands in a party that lost Olmert to allegations of graft.
She told reporters on Thursday that she intends "to bring together Kadima factions and to go on this new path together."
Livni is the chief Israeli negotiator with the Palestinian Authority as the two sides work toward a peace deal. She also refuses to be tied to the Bush administration's vision of a peace deal by the end of this year.
Meanwhile, police have recommended that Olmert be indicted on corruption charges.
Israeli authorities say Olmert, while serving as Jerusalem mayor and a government minister, asked various public organizations to cover the same expenses and pocketed the extra money.
In May, an American businessman testified that he gave cash-filled envelopes to Olmert, who denies any wrongdoing.
Olmert was Jerusalem's mayor from 1993 to 2003 and served in several cabinet posts from 2003 to 2006. He took over as prime minister after a 2006 stroke left then-premier Ariel Sharon in a coma from which he has never recovered.
