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Israeli Prime Minister Ariel Sharon has told the governing Likud party he is leaving to form a new political group ahead of early elections next year.
Sharon, a founding member of the right-wing party, announced his move in a letter to its chairman, reports BBC.
Earlier, the veteran leader asked President Moshe Katsav to dissolve parliament and call a snap election.
Aides to Sharon say he wants to break with party hardliners who opposed the Israeli withdrawal from Gaza.
Sharon's move redraws the political map of the country, according to analysts.
The BBC's Katya Adler in Jerusalem says that in the next poll voters will be presented with three main choices - the Likud party on the right, the Labour party on the left, and Mr Sharon's new movement in the centre.
The prime minister is said to have the support of about 14 of Likud's 40 current MPs, including five cabinet ministers, our correspondent adds.
The Knesset has 120 seats.
More than 20 Likud MPs held their weekly meeting in parliament on Monday, the Associated Press news agency reports.
The leather chair normally reserved for Mr Sharon at the head of the table had been pushed to the side, the agency reports.
Katsav says he is holding consultations, after Sharon's request for early elections.
"The Knesset as it cannot function properly in its current form," Katsav told reporters.
Sharon and Labour leader Amir Peretz are understood to have agreed earlier in the week to bring forward elections from November to either February or March 2006.
Labour and Likud formed a national unity government last December, after Sharon lost his majority in parliament over the unilateral disengagement plan for the Gaza Strip and parts of the West Bank.
The pullout, carried out in August this year, upset many hardliners within the party.
Peretz announced plans to withdraw from the coalition government soon after being elected as Labour leader earlier this month.
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