Israeli Prime Minister Ehud Olmert may have announced that he will resign as soon as his ruling Kadima party has chosen a new leader next month, but that doesn't mean the prime minister has given up hope of reaching an agreement with the Palestinians or the Syrians.

Details of Olmert's peace proposal to Palestinian leader Mahmoud Abbas were recently leaked to the press, and the prime minister's aides are scheduled to head back to Istanbul for another round of indirect talks with Syrian officials.

It's legacy time for Ehud Olmert: he doesn't want to be remembered as the prime minister who got run out of office because he received cash-stuffed envelopes from a U.S. Jewish businessman. He would much prefer that the history books record he was the architect of a peace deal with the Palestinians or the Syrians.

A government official who spoke to IPS on condition of anonymity, said the prime minister does not plan to tread water until Kadima chooses his replacement next month. He would not be drawn, however, on whether a deal with the Palestinians or the Syrians was more likely, but he did point out that only once the Syrians had agreed to direct negotiations would it signal that Damascus was serious about trying to reach an agreement with Israel.

For now, says the official, the impression is that the Syrians want to have their cake and eat it: Damascus wants to enjoy warmer ties with the West that have come from its readiness to engage in indirect, Turkish-mediated contacts with Israel, but at the same time is not prepared to fully and directly engage with Jerusalem in an effort to reach a comprehensive peace agreement.

Hardline Israeli lawmakers are incensed by Olmert's efforts to shape a diplomatic breakthrough even after he has announced he plans to resign. Zevulun Orlev, leader of the National Religious Party, says the prime minister no longer has a mandate to conduct negotiations. But his major concern, he told IPS, is that any agreement Olmert reaches with the Palestinians or the Syrians will have to be honoured by the next government.

More dovish lawmakers, who support ongoing talks, don't believe Olmert is in any state to do a deal, lacking not only domestic political support but also an Arab partner who would be willing to reach an agreement with an Israeli leader who has already announced he is quitting.

But Olmert appears undeterred. He has provided Abbas with a proposal for an agreement in principle on the borders of a future Palestinian state, on refugees and on security arrangements. According to a report in the daily Haaretz, which first revealed the plan, Olmert has proposed withdrawing from 93 percent of the West Bank, with the Palestinians receiving land in the Negev desert, near the Gaza Strip, as compensation for the areas Israel will retain.

The seven percent of the West Bank that Israel would annex would include the large settlement blocs, while the border of the new Palestinian state would be similar to the route of the West Bank separation barrier Israel is building. There would also be a highway connecting Gaza and the West Bank that would run through Israel and allow the Palestinians to move between the two areas.

The proposal does not include immediate implementation if an agreement is reached. Rather, the prime minister is aiming for a "shelf" agreement that would be implemented only once Hamas was no longer in control of Gaza, and the Palestinian Authority, led by President Mahmoud Abbas of the more moderate Fatah, had established its control again in the coastal strip.

According to the government official who spoke to IPS, the sides have made serious progress on the issues of borders, refugees and security arrangements. If an agreement can be reached in principle, the thinking goes, it could provide an alternative paradigm to Hamas, which refuses to recognise Israel, and serve as a rallying point for moderates on both sides.

Palestinian officials have rejected the proposal as "a waste of time," saying it does not ensure the territorial contiguity of the future Palestinian state and fails to deal with the issue of Jerusalem. The Palestinians have proposed that Israel be allowed to maintain two percent of the West Bank.

The problems Olmert faces in trying to shape his legacy are not confined to the Palestinians. Both Foreign Minister Tzipi Livni -- the frontrunner to replace Olmert as Kadima leader ahead of the Sep. 17 primary -- and Defence Minister Ehud Barak are opposed to reaching an agreement. They prefer to wait and see if a new government can be formed after the Kadima primary or whether the country will be heading for a general election early next year.

Olmert will also be watching closely. If a new government is formed after the Kadima primary, it will only give him until November to secure his legacy. If, however, his successor is unable to form a new government and the country heads to an election early next year, he may find he still has some time on his side.