Monday, November 21 2005 09:45 Hrs (IST) - World Time -

Tel Aviv: Israel Prime Ariel Sharon is set to quit his right-wing Likud faction today (Nov 21, 2005), Israeli media reported, as the Labour party paved the way for a general election early next year by voting to quit the government.

Sharon will announce today his resignation from Likud and the dissolution of the parliament for early elections, Israeli television and army radio reported late last night.

Sharon's spokesman Asaf Shariv told AFP he could neither confirm nor deny the reports.

The Prime Minister was set to hold showdown talks today with Likud MPs amid mounting expectations that he would jump ship ahead of a looming general election and form a new centrist party with recently-deposed Labour leader Shimon Peres in a major realignment of the Israeli political scene.

The Labour party paved the way for a general election early next year by voting yesterday to pull out of the government, ending a 10-month coalition that allowed Sharon to push through the unilateral withdrawal of Israeli troops and settlers from the Gaza Strip.

The motion to leave the governing coalition, approved by an overwhelming show of hands at a meeting of Labour's central committee, came after new leader Amir Peretz said the party should stop propping up the current regime.

In talks last week, Sharon and Peretz agreed in principle that elections should be brought forward from November 2006 to either February or March.

Sharon met his cabinet for the final time yesterday and made clear he would continue working with Peres, in comments that bolstered speculation he will leave Likud and form his own centrist party.