Ariel Sharon, the Israeli Prime Minister, took the biggest gamble of his political career today when he resigned from his right wing Likud party and called for snap elections that he will contest as head of a new, centrist party.

His move, redrawing the political map of Israel, appears to have completed his transformation from hard-liner to moderate - and analysts and Palestinian officials said that it could boost prospects for progress in the peace process.

Confidants of the 77-year-old leader said that Mr Sharon felt that Likud right-wingers, who tried to block this summer’s Gaza pullout, were imposing too many constraints and would prevent future peace moves.

In a televised press conference this evening Mr Sharon said that he would have "wasted time with political wrangling" had he remained in the Likud party that he helped to found. He admitted however that his decision to leave was fraught with risk.

He described his new party - expected to be called "National Responsibility" - as "liberal", and said that it would give Israel new hope for peace.

The Gaza pullout gave Israel a "historic opportunity," and "I will not allow anyone to miss it," he said. Sharon said he did not have a new peace plan, should he get re-elected. He said earlier he remained committed to US-backed road map plan, which envisions Palestinian statehood.

The dramatic events began with Sharon’s decision last night, after a weekend of agonising, to leave the party he helped to found in 1973. This morning, Mr Sharon asked President Katsav to dissolve parliament, a step that would move the vote to the beginning of March, or eight months ahead of schedule. Mr Katsav said he would weigh the request and decide quickly, after consulting with leaders of other parties.

At midday, Mr Sharon met at his office with 11 breakaway Likud legislators, expected to form the core of the new party.

At the same time, more than 20 Likud MPs held their weekly meeting in parliament. The faction chief, Gideon Saar, announced that Mr Sharon had sent a letter announcing his resignation from the party.The oversized brown leather chair, normally reserved for Mr Sharon at the head of the oval table, was pushed to the side.

Mr Sharon formally announced the split in a nationally televised news conference this evening.

His decision sets the stage for a turbulent election campaign likely to pit a smaller, more hawkish Likud, possibly led by Binyamim Netanyahu, the former prime minister, against Mr Sharon and the new Labour Party leader, Amir Peretz, the former union boss who has rejuvenated Labour with his appeal to the working class and Sephardic Jews of Middle Eastern descent.

One poll today indicated that an alliance of Mr Sharon’s new party with the moderate Labor and leftist parties would command a comfortable majority in the 120-member parliament.

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