Moshe Katsav was expected to step down as Israel's president after agreeing today to plead guilty to sexual harassment rather than face more serious charges that he raped female staffers.

Under the plea agreement announced by Atty. Gen. Menachem Mazuz, the 61-year-old Katsav will avoid jail time, raising an outcry among women's rights activists who saw the case as an important test of Israel's commitment to stamp out sexual harassment in the workplace.

The presidency in Israel is largely a ceremonial position; political power rests with the prime minister.

The Katsav case was among a list of scandals that have eroded Israelis' confidence in their leaders. Justice Minister Haim Ramon quit after being accused of forcibly kissing a female soldier and later was convicted of an indecent act. Corruption allegations also have swirled around top officials, including Prime Minister Ehud Olmert.

The president faced possible indictment on charges that he raped and sexually harassed female subordinates while serving as president and earlier as tourism minister. In January, Mazuz warned Katsav that authorities had enough evidence to indict on allegations involving four women, but the attorney general had yet to issue formal charges.

Katsav agreed to plead guilty to lesser charges, including sexual harassment, indecent acts and harassment of a witness, Mazuz said today. Katsav will pay damages, but prison time was suspended under the deal, which requires court approval.

Katsav was expected to resign later today, though that move was largely symbolic because his term ends next month. The Israeli parliament had already elected a successor, Shimon Peres, who takes over July 15.

Mazuz defended the decision to drop the more serious charges, saying they were going to be difficult to prove in court.

"I have reached the conclusion that I cannot in fact determine that we have crossed the threshold of the reasonable chance of conviction," Mazuz told reporters.

The plea would spare the country and alleged victims the spectacle of a trial and prevent further damage to the presidency, Mazuz said.

"From the status of No. 1 citizen, he will have dropped to the status of a man convicted of sex offenses, bearing eternal turpitude and shame," Mazuz said.

Women's rights advocates accused Mazuz of giving Katsav preferential treatment and undermining efforts to encourage Israelis to step forward with complaints about harassment on the job.

"We talk about citizens being equal before the law, and here we see a man of stature, power, money, advisors, the finest attorneys - and all these together succeed in imposing their way on the state of Israel and reach a deal that conveys a grave message," Shelly Yacimovich, a lawmaker from the center-left Labor Party, told Israel Radio.

Katsav, elected to a seven-year term in 2000, had vehemently denied wrongdoing since sexual-misconduct allegations were lodged last summer by a presidential staffer, identified publicly only by her first initial, A. Other women later stepped forward with additional allegations, but the statute of limitations had run out on some of those charges.

In January, Mazuz notified Katsav that he planned to indict pending the outcome of a subsequent hearing. But after that hearing in May, Katsav's lawyers and prosecutors began discussing a plea bargain.

Katsav's lawyers said they persuaded him to admit guilt to lesser charges to avoid the rape indictment.

Moshe Negbi, a legal analyst for Israel Radio, said the outcome would leave few Israelis satisfied.

"The president maintains he did nothing but is willing to confess so as to spare his family the suffering. And the women say they aren't retracting a single word, but the prosecution capitulated to a man in high office," Negbi said. "The public will believe in either option, but will no longer believe in the system itself."

EU regulators took legal action against Germany on Wednesday for Berlin's refusal to change a law shielding Deutsche Telekom AG's high-speed Internet network from rivals.

The European Court of Justice will now have to decide if Germany can keep a law giving Deutsche Telekom a de facto monopoly on a glass-fiber DSL internet network it built to allow it recoup the cost without of setting up an infrastructure with sharing it with others.

The EU executive's arm said this departure from normal regulation breaks Europe-wide telecom rules giving new providers the right to use telephone and Internet networks.

"The Commission has repeatedly warned Germany that its new telecoms law violates EU telecom rules but without success," said EU Telecom Commissioner Viviane Reding. "We want to ensure Germany can benefit from a healthy, competitive and fully functioning market."

Despite last-ditch negotiations, the EU said the German government was unwilling to change the law the way the EU wanted and continued to defend its position.

Deutsche Telekom aims to roll out a high-speed optical fiber network that will transmit data up to 20 times faster than current offerings.

The plan is to provide Germany's 50 largest cities with high-speed broadband lines by 2007. Berlin had agreed with Deutsche Telekom's argument that it could only make a decent profit on the network if it was exempt from any requirement to offer its lines to rivals.

However, the Commission says Deutsche Telekom's heavy share of the German market already give it a major advantage over other companies. It controls more than 9 million telephone lines out of the country's 12.9 million connections.

An International Atomic Energy Agency (IAEA) delegation plans to visit Pyongyang next week to discuss procedures for shutting down the North's Yongbyon reactor, which produces the raw material for bomb-making plutonium.

But a North Korean official in Vienna, where the UN nuclear watchdog is based, said his country had not yet given the formal go-ahead for the visit.

"The visit date of the delegation is not confirmed because the release of the frozen funds of DPRK (North Korea) at Banco Delta Asia in Macau has not been completed," embassy spokesman Hyon Yong-Man told reporters.

"Our side already informed the IAEA that we have no objections for the agency to prepare the visit as planned, but we are not ready to give our official confirmation for the scheduled visit of the agency due to the only reason of unfinished remittance."

The comments cast a cloud over apparent swift progress since Pyongyang said last Saturday the unfreezing of the funds "has reached its final phase," and invited an IAEA team to visit at an unspecified date.

The US envoy, arriving at the airport in steady rain, said his aim was to get the six-party talks process moving. The forum grouping the two Koreas, China, Russia, Japan and the United States reached a disarmament deal on February 13 but the cash row blocked any progress.

"We hope we can make up for some time we lost this spring," he said after being greeted by a smiling Ri Gun, director of the foreign ministry's America bureau.

China said its Foreign Minister Yang Jiechi would visit Pyongyang on July 2-4, with nuclear disarmament on the agenda. It described Hill's visit as positive.

"We hope it will be conducive to implementing the initial actions (of the February accord) and be of benefit to improving relations between North Korea and the US," said foreign ministry spokesman Qin Gang.

Choson Sinbo, a pro-North Korean newspaper published in Tokyo which often reflects official thinking, said the disarmament process may now speed up "if the US and the DPRK (North Korea) continue to build up mutual trust."

South Korea's foreign ministry said Hill would meet counterpart Kim Kye-Gwan, who extended the invitation, and vice foreign minister Kang Sok-Ju, who is close to reclusive leader Kim Jong-Il.

It said they would discuss a "road map" on implementing the February deal and the normalisation of bilateral relations.

The US State Department said Hill would leave Friday. He was to return to South Korea and go on to Tokyo on his way home.

In the February deal, the North agreed to disable its nuclear programmes in exchange for major aid and diplomatic benefits, including a possible normalisation of relations with Washington.

The pact followed a surge in tensions after the North carried out its first nuclear weapons test last October.

Four IAEA officials arrived in South Korea Thursday to discuss the mission scheduled for next week. A follow-up team will be sent to North Korea within weeks to verify the actual shutdown if it goes ahead.

It will be the inspectors' first visit since they were kicked out in late 2002.

Hill's trip is the first to North Korea by a top State Department official since October 2002, when his predecessor James Kelly confronted the North with alleged evidence of a secret nuclear programme using highly enriched uranium.

That accusation, and the North's denial, triggered off the latest nuclear crisis and the collapse of a 1994 bilateral denuclearisation accord.

Egypt, a key U.S. ally in the Middle East, is trying to avoid clashing with Washington over its very different approach to dealing with the Hamas takeover of the Gaza Strip, an Israeli expert said here on Thursday.

Egyptian President Hosni Mubarak is hosting a summit between Israeli Prime Minister Ehud Olmert and Palestinian Authority Chairman Mahmoud Abbas on Monday. Jordan's King Abdullah II will be there as well.

But Mubarak is seeking a different outcome than the one discussed earlier this week between Olmert and President Bush, said Dr. Yoram Meital, chairman of the Chaim Herzog Center for Middle East Studies and Diplomacy at Ben-Gurion University of the Negev.

President Bush and Olmert met this week and reiterated their support for Palestinian Authority Chairman Mahmoud Abbas, his Fatah faction and the new government Abbas installed following the violent Hamas takeover of the Gaza Strip last week.

Olmert has described the Hamas takeover as a "new opportunity" for Israel to engage in peace negotiations with Abbas while isolating Hamas.

"Egypt is not speaking the same language as Israel and the U.S.," Meital said in Jerusalem on Thursday.