JERUSALEM, June 28 — The Israeli government has dropped rape charges against President Moshe Katsav in exchange for his agreement to step down and to plead guilty to lesser charges, the attorney general, Menachem Mazuz, announced Thursday.

Mr. Katsav, 61, will receive a suspended sentence and will pay a total of $11,695 in compensation to two of the women who accused him, Mr. Mazuz said. One of them had worked for Mr. Katsav when he was tourism minister in the late 1990s; the other worked in his office in 2003 and 2004. Mr. Katsav will plead guilty to committing indecent acts without consent, sexual harassment of the two women and harassing a witness.

He is expected to resign on Friday. His seven-year term as president, a largely ceremonial post, was to end in July. Shimon Peres is expected to take office as president on July 15.

The announcement of a plea bargain caused debate and expressions of anger from Israelis who said Mr. Katsav was being treated too lightly.

Mr. Mazuz defended the reduced charges at a news conference, saying that Mr. Katsav had gone “from the status of No. 1 Citizen to the status of sex offender, with the shame that will follow him from now on.”

Mr. Katsav had maintained that he was the innocent victim of a witch hunt or conspiracy. His lawyers suggested Thursday that he had made the plea bargain only to avoid a long and embarrassing trial. One of his lawyers, Avigdor Feldman, told Israel Radio that the president “will admit that he hugged” one complainant, “and that he touched her leg,” acts, that did not constitute “a blatantly sexual situation.”

“We persuaded the president, almost forcibly, to admit to this charge,” he added, “because if he didn’t, there would have been an indictment on two counts of rape.”

“He would have been acquitted ultimately, but would have gone through hell first,” he said.

Another of Mr. Katsav’s lawyers, Zion Amir, said that some “touching of hips, an attempt at a kiss, and a kiss” had occurred.

Ten women made accusations against Mr. Katsav to police investigators. The final indictment focused on four cases. The attorney general said that many cases had problems of proof and evidence, and that in some cases the statute of limitations had expired. He said the settlement was in the public interest because it would reduce “the harm to the institution of the presidency.”

Moshe Negbi, a commentator on legal affairs for Israel Radio, said the attorney general’s statement had raised more questions than it had answered. “If the acts of which the president is charged are so serious —and I think they are — how is the case being closed with a suspended prison sentence?” he asked.

In March, an Israeli court sentenced former Justice Minister Haim Ramon to 120 days of community service for forcibly kissing a female soldier. Mr. Negbi referred to another case of a prominent businessman, Ofer Glazer, who served four months of a six-month term for sexual harassment.

“This is the difference between someone in power and other people,” Mr. Negbi said.

Mr. Mazuz noted that the case began almost a year ago, when Mr. Katsav invited him to his office and complained that a woman who worked for him was blackmailing him. The police inquiry soon turned against Mr. Katsav as the employee, who can only be identified as A. by court order, raised accusations of sexual offenses.

Mr. Mazuz said that he was closing the case of A.’s complaint and Mr. Katsav’s without charges, because of a lack of evidence.

In response, A. held a televised news conference on Thursday, her face blurred to maintain her anonymity. By turns sounding tearful and composed, she criticized the plea deal, saying it gave sex offenders “a license to do whatever they want.” She said Mr. Katsav was “a rapist, a serial sex offender and a pervert.”

Afterward, Mr. Feldman, Mr. Katsav’s lawyer, said that A. had lied brazenly in giving her version of events. He has proof that she intends to write a mudslinging book about Mr. Katzav, inspired by Monica Lewinsky, Mr. Feldman said.

In another development on Thursday, the Israeli Army conducted an incursion in Nablus on the West Bank. An army spokesman described it as a move against “terrorist infrastructures.” During the incursion, five Israeli soldiers were wounded by Palestinian fighters, six explosive devices were thrown at, or activated against, the Israeli forces and two Fatah operatives were arrested, the army said.

The Fatah-affiliated Al Aksa Martyrs Brigades took responsibility for wounding the soldiers in a call to the news agency Maan.

Nablus is known as a base for militants. Last year, 117 of the 187 people suspected of planning suicide bombings who were arrested in the West Bank came from Nablus, the army said in a statement.

Palestinian officials associated with President Mahmoud Abbas, of Fatah, condemned the incursion as “unhelpful” when Israel is supposed to be trying to bolster Mr. Abbas’s standing in the West Bank, especially with rival Hamas controlling Gaza.

Nimr Hamad, a political adviser to Mr. Abbas, said that Prime Minister Ehud Olmert of Israel and Mr. Abbas had agreed in principle to form a joint committee to discuss the details “of the wanted people and the issue of disarming groups.”

The idea was raised Monday at the Sharm el Sheik meeting of regional leaders, he said, “but instead of giving us time to start convincing the groups — and first among them those belonging to Fatah — these incursions do not help.”

This week, Mr. Abbas said all Palestinian militant groups should be disarmed. But Mr. Hamad said that, before acting on disarmament, the Palestinians were awaiting guarantees from Israel that it would stop its policy of going after the armed men.

Copyright 2007 The New York Times Company