JERUSALEM: A leading rival of Israeli Prime Minister Benjamin Netanyahu in the right-wing Likud party resigned from parliament Wednesday to challenge the premier in elections which could be held as early as March.

Gideon Saar, an influential figure in conservative Israeli politics, had challenged Netanyahu in a Likud leadership race a year ago, but decisively lost the primary.

With a Netanyahu-led coalition now edging towards collapse, risking a fourth Israeli election in less than two years, Saar announced his break with Likud and his plans to form a new political party.

"I will create a new movement with the goal of replacing Netanyahu," Saar said in a virtual press conference late Tuesday.

Saar officially resigned from Israel's parliament, the Knesset, on Wednesday, ahead of embarking on his "candidacy for prime minister," a statement said.

It is not yet clear if Israelis will again head to the polls in 2021, but two members of parliament have already announced they would run with Saar.

Communications Minister Yoaz Hendel and Zvi Hauser, who ran in the last election as part of the centrist Blue and White party before forming their Derech Eretz faction, pledge alliance to Saar on Wednesday.

"We need a right-wing alternative to Netanyahu," Hendel said in a live broadcast. "His legal situation dictated his political moves and decision making processes.

"In the upcoming elections, Dereh Eretz will join Gideon Saar's movement," Hendel said.

"Gideon is the right home to the hundreds of thousands of right-wing voters," he said.

Netanyahu's key coalition partner, Defence Minister Benny Gantz, in a preliminary vote last week backed an opposition bill to dissolve the Knesset.

A Knesset committee tasked with reviewing that bill proposed March 16 as an election date, if parliament is ultimately dissolved.

But the bill must still pass through several legislative steps before final approval, and there is space for a wide range of political maneuverings before an election must be called.

Gantz charges that Netanyahu has acted only in his own political self-interest and placed fighting his ongoing corruption trial above the needs of ordinary Israelis suffering unprecedented economic hardship due to the pandemic.

Under the coalition agreement, Gantz -- who is also the alternate prime minister -- is to take over as premier in November 2021.

Gantz has said that the only way for Netanyahu to avoid another election is to agree on a 2021 budget. Netanyahu's critics say the veteran leader is refusing to agree a budget to ensure the government collapses before he has to hand power to Gantz.

Saar, seen as close to ultra-Orthodox Jewish parties, is a former Netanyahu loyalist who served in his previous governments.

On several key issues, he stands to the right of Netanyahu, who has been in power since 2009.

Saar backs Israeli annexation of Jewish settlements in the occupied West Bank, a move Netanyahu agreed to freeze in exchange for diplomatic normalisation deals with the United Arab Emirates and Bahrain.

Leading political columnist Ben Caspit, writing in the Ma'ariv newspaper, said there was "fully justified" panic within Netanyahu's ranks over Saar's defection.

"Saar is offering the right-wingers who are fed up with Netanyahu an alternative for whom they'll have an easier time voting," he wrote.

Right-wing political scientist Emmanuel Navon, who is supporting Saar, told AFP that Likud had become "a personality cult" under Netanyahu.

Saar's goal, according to Navon, is to re-establish a right wing that is rooted in conservative principles, not a party that is merely Netanyahu's "personal operation".

The prime minister went on trial in May on charges of bribery, fraud and breach of trust.

He has been accused of accepting improper gifts and offering to trade favours with media moguls in exchange for favourable coverage, but he denies wrongdoing.

So far the proceedings have focussed on procedural issues and he is next due to attend court in February.