The Israeli Prime Minister, Ariel Sharon, and Israel's new Labour party leader, Amir Peretz, have agreed to hold elections between late February and March 2006.
The elections were due to be held in a year's time.
Mr Peretz had said he planned to withdraw his party from the coalition government with Mr Sharon's Likud party.
Labour had propped up the coalition since January, in support of the Gaza withdrawal plan.
Mr Peretz said he hoped an exact date for the election would be set by Monday.
Meanwhile, the Israeli army killed two Palestinians in an operation near the northern West Bank city of Jenin today.
Israel has stepped up raids in the West Bank following a suicide bombing by Islamic Jihad that killed six Israelis last month.
