After nearly a week of public bickering, Fox News Channel and Matt Drudge made peace Thursday with an amicable agreement that will release the Internet gossip from his contract with the news cabler and cancel his weekly show.

In making the announcement, John Moody, VP, news editorial, Fox News, said: “We felt Mr. Drudge was in breach of his contract, but we accept his apology and respect his desire to leave television.”

Earlier this week, Fox News threatened to sue Drudge for breach of contract. The conflict began Saturday when Drudge refused to host his show after he was prohibited from using a photo of a fetus undergoing emergency surgery. Following the incident, Drudge posted “I will not be censored” on his Web site and publicly criticized Fox News’ policies.

In making his apology, Drudge said, “In the heat of the moment, in pursuit of a story, I made comments I regret about the innovative Fox News Channel and its executives. I look forward to a continuing relationship with the Fox News Channel for years to come and may even make guest appearances on its programming from time to time.”