I. Lewis "Scooter" Libby, Vice President Cheney's chief of staff, was indicted Friday on charges of lying to federal investigators and obstructing justice in the 22-month CIA leak investigation. Libby, the first sitting White House aide charged with a crime in recent history, resigned.

Karl Rove, the president's top strategist, narrowly escaped indictment after providing new information during eleventh-hour negotiations with Special Counsel Patrick J. Fitzgerald but could still be charged in the case, according to three people familiar with the talks. A source close to Rove said the senior strategist's fate will be known soon.

Libby was one of the most powerful staff members in government and Cheney's closest adviser. Libby faces up to 30 years in prison and $1.25 million in fines if convicted of two counts of making false statements, two counts of perjury and one count of obstructing justice in the secretive probe that rattled the White House and rekindled the debate over the Iraq war.

Libby issued a statement through his attorney, Joseph A. Tate, in which he said: "I am confident that at the end of this process I will be completely and totally exonerated."

But Fitzgerald's indictment depicts Libby as concocting scenarios that never occurred. In one instance, Libby said he first learned of Valerie Plame's role as a covert CIA operative from NBC's Tim Russert in early July. Russert and Libby never discussed the operative, according to the indictment. In fact, it says, he learned of her from Cheney, State Department officials and a CIA briefer more than a month earlier.

The 22-page indictment leaves open the possibility of more bad news to come: the specter of a public trial featuring top White House officials and the chance of more indictments in the weeks ahead.

Fitzgerald, the U.S. attorney in Chicago, did not charge anyone with the crime he originally set out to investigate nearly two years ago: whether officials illegally disclosed Plame's identity to the media to discredit her husband, former ambassador Joseph C. Wilson IV, a harsh critic of the administration's Iraq war policy.

Fitzgerald indicated that he considered it, but that Libby's alleged lies made it difficult to prove the root crime of intentionally unmasking a CIA agent.

As for Libby's role as the first person to leak Plame's name to a reporter, the prosecutor said Libby "lied about it, under oath, repeatedly" and damaged national security in the process. That, he added, "to me defines a serious breach of public trust."

Libby is expected to appear for arraignment before U.S. District Judge Reggie B. Walton on Tuesday or Wednesday. Walton was appointed to the federal bench by Bush.

Bush and Cheney said they were saddened by Libby's indictment and resignation -- but praised him as a loyal public servant and offered no criticism of his actions.

Although damaging to the Bush presidency, the indictment was not as bad as many top officials had feared. Before Friday's events, there was widespread concern inside the White House that Rove and others could be charged with either providing false statements or participating in an effort to leak Plame's name.

But at his news conference, Fitzgerald said that the investigation, while nearly complete, is not over.

The biggest piece of unfinished business involves Rove. Fitzgerald appeared set to charge Rove with making false statements until the White House deputy chief of staff provided new information last Tuesday that gave the prosecutor what two people described as "pause."

It is unclear what information Rove turned over. It is also unclear if it will be enough to prevent a grand jury from indicting him in the weeks ahead. If he decides to seek charges against Rove, Fitzgerald would present the evidence to a new grand jury because the one that indicted Libby expired Friday and its term cannot be extended.

"The Special Counsel has advised Mr. Rove that he has made no decision about whether or not to bring charges," Rove's attorney, Robert Luskin, said in a statement. "We are confident that when the Special Counsel finishes his work, he will conclude that Mr. Rove has done nothing wrong."

Fitzgerald refused to comment on Rove. A source close to Rove added, "There is still the chance that Mr. Rove could face indictment." Lawyers involved in the case said Fitzgerald is likely to put pressure on Libby to provide evidence against Rove or other potential targets.

Friday's indictment brought new clarity, if not conclusion, to the CIA leak probe. It alleges that Libby, who was privy to the nation's most sensitive information, sought help from the White House and the national security apparatus in his effort to discredit Wilson.

It charges that he "knowingly and willfully" lied to FBI agents and the federal grand jury many times about how he learned about Plame, and then leaked information about her to the public. It also provides new and vivid details about Libby's alleged efforts to learn about Plame from the CIA, the State Department and at least one colleague in the vice president's office long before her name was publicly disclosed.

The prosecutor said that at a time when the United States is in dire need of human intelligence abroad to help prevent terrorist attacks, Libby's decision to discuss Plame's identity with reporters should frighten all Americans. "The fact that she was a CIA officer was not well-known, for her protection or for the benefit of all us . . . for the nation's security," he said.

Wilson, a former diplomat, had been sent on a CIA-sponsored mission to the African nation of Niger in 2002 to investigate whether Iraq was seeking nuclear-weapons-grade material -- as some in government, including a few in Cheney's office, suspected. Wilson returned from Niger unconvinced and reported his findings to the CIA.

But in his 2003 State of the Union speech, Bush used the allegation as part of an effort to show that Iraq was actively pursuing weapons of mass destruction. Shocked and angered, Wilson set out to challenge the claim, starting with private conversations with reporters and culminating with a column in the New York Times, an on-the-record interview with The Washington Post and an appearance on "Meet the Press" on July 6, 2003. Eight days later, his wife's identity was revealed.

I. Lewis "Scooter" Libby, Vice President Cheney's chief of staff, walks from the West Wing of the White House. Libby was indicted on five charges.