Israeli Defence Minister Ehud Barak - a key minister of the coalition government - is resigning as head of the Labour party to form his own faction, party officials say.
Mr Barak is heading a breakaway group including four other Labour parliamentarians, reports say.
It remains unclear what effect the move will have on Benjamin Netanyahu's government, which retains its majority.
Mr Barak served as Israel's prime minister between 1999 and 2001.
A party official said four of Labour's 13 parliamentarians would be joining Mr Barak's new faction.
Mr Netanyahu's coalition currently has a majority, with 74 seats - including its Labour members - in the 120-seat Knesset.
Genuine about peace?
Mr Barak's move will allow the defence minister's faction to remain in the country's right-wing coalition government.
The Labour movement was central to the creation of Israel in 1948, but there have been tensions within the party for months.
It had been due to vote next month on whether to quit the right-wing coalition government over Mr Netanyahu's handling of the Middle East peace process.
Mr Barak's surprise move pre-empts that decision, suggesting he still believes Mr Netanyahu is genuine about seeking peace with the Palestinians, says the BBC's Jon Donnison in Jerusalem.
While the move should allow the coalition government to survive, analysts say it also shows the disarray among the Israeli left.
