JERUSALEM - Former Prime Minister Ehud Olmert, who claimed to be on the cusp of a historic peace deal with the Palestinians just a few years ago, now is set to become the first Israeli leader to go to prison after the Supreme Court upheld a bribery conviction against him Tuesday.

The decision capped a seven-year legal saga that severely undermined the last serious round of peace talks and propelled hard-line Prime Minister Benjamin Netanyahu to power.

In some ways, Tuesday's decision was a success for Olmert. The five-judge panel dismissed the most serious bribery charge against him and reduced his original prison sentence from six years down to 18 months. He is set to report to prison on Feb. 15.

"A stone has been lifted from my heart," a visibly relieved Olmert told reporters. "I said in the past, I was never offered and I never took a bribe. And I say that again today."

But it nonetheless served as a reminder of what might have been had he managed to complete his term before the scandal forced him to step down in early 2009.

Olmert was a fixture in Israel's hawkish right wing when he began taking a dramatically more conciliatory line toward the Palestinians as deputy prime minister a decade ago. He played a leading role in Israel's withdrawal from the Gaza Strip in 2005.

He became prime minister in January 2006 after then-Prime Minister Ariel Sharon suffered a debilitating stroke - and subsequently led their newly formed Kadima Party to victory in parliamentary elections on a platform of pushing further peace moves with the Palestinians.

In a recent interview broadcast on Channel 10 TV, Olmert said his political transformation began while he was mayor of Jerusalem during the 1990s and early 2000s. He said the wide gaps between the city's Jewish and Arab neighborhoods led him to conclude that the continued occupation of millions of Palestinians was unsustainable.

A gifted orator, Olmert broke a series of taboos while in office - warning that Israel could become like apartheid South Africa if it continued its occupation of the Palestinians and expressing readiness to relinquish control of parts of the holy city of Jerusalem under a peace deal.

He led his government to the Annapolis peace conference in November 2007 - launching more than a year of U.S.-brokered peace talks with the Palestinians.

Olmert has said he made unprecedented concessions to the Palestinians during those talks - including a near-total withdrawal from the West Bank and an offer to place Jerusalem's Old City under international control - and was close to reaching an agreement at the time of his resignation.

In last month's TV interview, Olmert described presenting his offer to Palestinian Authority President Mahmoud Abbas on Sept. 16, 2008. At the time, Olmert was enveloped in scandal and had already announced his intention to step down, but elections were still five months away.

"I told him, 'Remember my words, it will be 50 years before there will be another Israeli prime minister that will offer you what I am offering you now. Don't miss this opportunity,' " Olmert said.

In the same documentary, Abbas confirmed Olmert's offer. But he said the Israeli leader pressured him to sign the deal without allowing him to study a proposed map, and that the offer did not adequately resolve the fate of Palestinian refugees.