MOSCOW, DEC. 25 -- Mikhail Gorbachev resigned today as president of the Soviet Union, transferring control of the country's huge nuclear arsenal to Russian President Boris Yeltsin as the red Soviet flag atop the Kremlin was lowered for the last time.

Immediately after announcing his resignation in a live television broadcast, the last leader of the world's first communist state signed a decree formally relinquishing command of the 3.7 million-member Soviet armed forces. Within a half-hour, the white, red and blue Russian flag was flying above Gorbachev's former Kremlin office, symbolizing the end of the Soviet Union and the collapse of Soviet communism 74 years after the Bolshevik Revolution.

In his farewell address, Gorbachev proudly defended his achievements as Soviet leader, including the dismantling of the totalitarian system and the inauguration of a new era in East-West relations. But he also struck a note of warning about the dangers that lie ahead for the 15 independent countries that have been carved out of the former Soviet Union, making clear that he had been deeply opposed to the "dismembering" of the unitary state.

Speaking from his Kremlin office at 7 p.m. (noon EDT), Gorbachev said: "This society acquired freedom, liberated itself politically and spiritually, and this is the foremost achievement -- which we have not yet understood completely, because we have not learned to use freedom."

Gorbachev's resignation as the Soviet Union's first and last executive president came after nearly seven tumultuous years in power that changed the face of his country and the world. Named general secretary of the Soviet Communist Party on March 11, 1985 -- one day after the death of Konstantin Chernenko -- Gorbachev promised to revitalize the world's second superpower and the system of state socialism. He ended up presiding over the destruction of both.

About 90 minutes before the speech, a Kremlin spokesman said, Gorbachev appealed by phone to President Bush for Western support of the new Commonwealth of Independent States and stressed the need for humanitarian assistance to help Russia and the other former Soviet republics through a difficult winter.

Yeltsin, widely recognized as the dominant political figure in the new 11-nation Commonwealth, promised today to rescue Russia from its economic and political malaise through a program of radical, market-oriented reforms, beginning with the removal of most price controls on Jan. 2. He also assured the West that Russia, as the principal successor state to the Soviet Union, would respect all disarmament and other international treaty obligations of the former Communist state.

"We will do all we can to prevent the nuclear button from being used -- ever," said Yeltsin, in an interview with Cable News Network several hours before he formally received the "nuclear suitcase" that holds the secret codes for launching thousands of strategic nuclear weapons, many of them aimed at the United States.

Yeltsin, who last June became Russia's first popularly elected president in its 1,000-year history, won a mass following by denouncing the Communist system from which he sprang and campaigning against the privileges of the ruling party elite. He remains a figure of great hope and charisma for millions of Russians, but his rough and sometimes unpredictable ways have also provoked concern in some quarters, including Western politicians who credit Gorbachev with ending the Cold War.

While the Russian leader inherits Gorbachev's role as the man with ultimate authority for unleashing Armageddon, the leaders of three other former Soviet republics with nuclear weapons -- Ukraine, Byelorussia and Kazakhstan -- also will be involved in the decision-making process. Yeltsin told the Russian parliament that all four presidents will be linked by a special communications system, allowing them to consult with each other on the use of nuclear weapons at any time of the day or night.

The independent Interfax news agency said Gorbachev was to have handed the three-pound suitcase, or chemodanchik, directly to his former political protege after the speech but that Yeltsin canceled the planned Kremlin meeting. Instead, the 60-year-old Soviet leader entrusted the nuclear-trigger transfer to Marshal Yevgeny Shaposhnikov, the outgoing Soviet defense minister, who has been appointed temporary commander of the Commonwealth's armed forces.

The swift-moving events at the Kremlin were the closest the Soviet Union, or Russia for that matter, has ever come to the peaceful transfer of power from one living leader to another. In the past, czars and general secretaries alike have been forced from power either by death or palace coup. But the orderly nature of today's transition belied the extraordinary circumstances surrounding Gorbachev's departure from office: A geopolitical colossus straddling one-sixth of the Earth's surface has ceased to exist.

Gorbachev pointedly avoided using the word "resignation" in his 12-minute farewell speech, which began with the words "Dear compatriots, fellow citizens," rather than with the ritual "Comrades." Instead, he announced that he had decided to "cease activities" as president of the Soviet Union in connection with the "creation of the Commonwealth of Independent States."

Insisting that he favors both sovereignty for the former Soviet republics and "preservation of the union state," Gorbachev said he could not agree with the policy of "dismembering this country and disuniting the state" adopted by Yeltsin and other republic leaders. He said that decisions of such magnitude should have been made on the basis of a clear expression of the "popular will."

Gorbachev softened his criticism by saying he would do everything in his power to support the new Commonwealth, but he has clearly distanced himself from the course now being pursued by Yeltsin. In both his farewell statement and a later interview with Cable News Network, he reserved the right to chide and criticize the new leaders should they stray from the democratic path he embarked upon in 1985.

Gorbachev told CNN he would resume some form of public life after taking what he described as his first real vacation in seven years. "I will not hide in the woods," he said. One of his spokesmen said he would head an international political research organization to be known as the Gorbachev Fund, or, more formally, The International Fund for Social, Economic and Political Research.

The speed with which the 20-by-10-foot Soviet flag was hauled down from the Kremlin following Gorbachev's resignation surprised many officials, who said they had been told earlier that the ceremony marking the liquidation of the Soviet Union would take place on New Year's Eve. Only a handful of tourists were present in Red Square beneath the floodlit Kremlin walls to watch the flag -- which had been kept in constant flutter by a continuous flow of warm air -- come down at 7:35 p.m. to scattered applause and a few whistles.

"It was strange how little reaction there was," said Uli Klese, a Berlin photographer vacationing here. "When the Berlin Wall came down, everybody was out on the streets. This was an event of the same kind of magnitude, but no one seemed to care."

Born out of the turmoil of the 1917 revolution and the civil war between Communists and monarchists, the Soviet Union formally came into existence on Dec. 30, 1922, incorporating Russia, Ukraine, Byelorussia and much of Central Asia. During World War II, Soviet dictator Joseph Stalin added the three Baltic states, the Romanian province of Bessarabia and a large slice of Poland, in addition to bringing much of Eastern and Central Europe under the Soviet sphere of influence.

In his speech tonight, Gorbachev cited the peaceful liberation of Eastern Europe from Soviet domination in 1989 as one of his main achievements. "We live in a new world," Gorbachev declared, reading from a prepared text of 4 1/2 pages of Cyrillic script held in a pale green binder. "We opened ourselves to the world, gave up interference into other people's affairs, the use of troops beyond the borders of the country, and trust, solidarity and respect came in response."

Reflecting on his years in power, Gorbachev said he remains absolutely convinced that he was correct to launch the reform movement known as perestroika, or restructuring. But he conceded that the task of reforming the Soviet Union had "turned out to be far more complicated than could be expected," and he acknowledged that he made many tactical mistakes along the way.

Gorbachev, who is blamed by many Soviets for their falling living standards, said he understood the widespread "popular resentment" at a time of grave economic crisis. But he expressed the hope that future generations would look more kindly on his efforts, saying that the attempt to change "so vast a country" with such a diverse cultural heritage could not have been carried out "painlessly without difficulties."

"I am leaving my post with apprehension, but also with hope, with faith in you, your wisdom and force of spirit," he told the 280 million people he had once led. "We are the heirs of a great civilization, and its rebirth into a new, modern and dignified life now depends on one and all."

As Gorbachev prepared for this climactic moment over recent days, fighting raged in several parts of the former Soviet Union, reflecting the nationalist passions that rose to the surface as soon as he relaxed centralized control. At least 34 people have been killed in the last four days in the southern republic of Georgia, as political opposition forces press their drive to oust President Zviad Gamsakhurdia.

Yeltsin told the Russian parliament today that Soviet army and Interior Ministry troops stationed in Georgia would be withdrawn, and he also announced plans for withdrawal of security forces from the Armenian-inhabited enclave of Nagorno-Karabakh in Azerbaijan -- focal point of a virtual civil war between those two peoples.

In other business, the Russian parliament passed a resolution formally changing the name of the massive republic to the Russian Federation, or, simply, Russia. The old title, Russian Soviet Federative Socialist Republic, was abolished, and plans were made to revive the czarist double-headed eagle as the national emblem.