JERUSALEM, Monday, Nov. 21 - Prime Minister Ariel Sharon has decided to quit the governing Likud Party, which he helped to found, and will create a new party to try to win re-election, according to Israel's army radio and a senior Likud member.

Mr. Sharon will announce his decision later on Monday and will ask Israel's president to dissolve Parliament and call for an election within 90 days, according to the normally reliable army radio.

"Ariel Sharon's decision is dramatic, unequivocal, to leave the Likud," the army radio quoted one person in Mr. Sharon's office as saying. The report said that Mr. Sharon and a major ally, Tzipi Livni, the justice minister, have begun to contact political allies to join the new party he would lead.

The senior Likud member said, "There are matters that he wants to accomplish that many in Likud would not accept."

Mr. Sharon, 77, has been battling self-styled "rebels" within Likud who opposed Israel's unilateral withdrawal from Gaza and four small settlements in the West Bank over the summer as a violation of the party's principles and history. The rebels have been led by former Prime Minister Benjamin Netanyahu, who quit the cabinet just before a final vote approving the Gaza withdrawal.

While he has kept his intentions to himself, Mr. Sharon has told intimates that he would like to be the leader who defines, at last, the borders of Israel. He has said that he does not want to be a prime minister whose hands are bound by a party that opposes territorial compromise with the Palestinians and would object to any significant Israeli pullback in the West Bank.

Mr. Sharon's reported decision to roll the dice was accelerated by the recent defeat as Labor Party leader of his ally Shimon Peres, 82, who had chosen to throw support to Mr. Sharon and join his ailing coalition to ensure that the Gaza withdrawal was carried out.

But Mr. Peres's successor, Amir Peretz, 53, won over Labor by insisting on breaking the coalition and forcing new elections. Earlier on Sunday, the Labor Party voted to pull its eight ministers out of the cabinet.

The Israeli president, Moshe Katsav, could refuse Mr. Sharon's request for early elections, but is more likely to accept. By law, in such a circumstance, elections must take place within 90 days, which would probably mean a vote in early March, preventing Mr. Sharon's enemies in Likud from delaying elections.

Mr. Sharon, a tough former army commander, is nicknamed "the bulldozer" for his tendency to force through obstacles to get what he wants. He has been accused of being arrogant and impetuous and was investigated in connection with illegal fund-raising - his son, Omri, has just concluded a plea bargain on such charges.

Mr. Sharon was investigated by an Israeli commission after the massacre in 1982 of Palestinian refugees in the Sabra and Shatila refugee camps in Lebanon by Israel's Christian allies there; he was found to have indirect responsibility for failing to foresee and prevent the massacre and was banned from serving again as defense minister.

But Mr. Sharon is also regarded by many Israelis as a leader of vision and stature, with the will to make hard decisions in the face of changing circumstances and stick to them, like the withdrawal from Gaza, and the toughness to defend Israelis against terrorism. He has been elected twice before as prime minister, in 2001 and 2003.

Early polls show that a new party led by Mr. Sharon would be the largest in the Parliament, with about 28 seats of 120, but he would need other parties to form a coalition. Likud has 40 seats, but Mr. Sharon faces severe dissent within the party and its central committee, which regards him as having betrayed the principles of Likud by his willingness to hand territory considered part of the biblical land of Israel over to the Palestinians without negotiations.

Mr. Sharon has received significant support from President Bush. But new elections will put any new moves toward peace on hold, even as the Palestinians are planning their own crucial elections for a new legislature on Jan. 25.

Mr. Sharon apparently made his final decision to leave the Likud Party over the weekend at his ranch, after consulting with his sons and a few close associates, including a publicist, Reuven Adler.

On Sunday, after leading what is likely to be the last meeting of the current cabinet, Mr. Sharon praised Mr. Peres and said, "This is the beginning of the joint work between us."

Mr. Sharon told his old rival and ally: "I won't let you turn away from completing the missions you are destined for. I'll call on your assistance in the future."

Israeli political commentators immediately saw the statement as a sign that Mr. Sharon would break away from Likud.

Historically, "instant" parties have not done well at the polls in Israel; even the country's founding leader, David Ben Gurion, got only 10 seats when he broke with Mapai in 1965 and formed his own party, Rafi, which also included Mr. Peres.

But Mr. Sharon is popular, and the prospect of his leaving Likud has already produced numerous rivals to Mr. Netanyahu, including the foreign minister, Silvan Shalom, and the defense minister, Shaul Mofaz.

Mr. Sharon would attract some prominent members of the Likud Party, including Ms. Livni, the justice minister, whose parents were Likud "royalty." Mr. Sharon is also likely to include some outsiders known for their security acumen, and some prominent Labor figures like Mr. Peres, whose long tenure has suddenly ended.

A Sharon exit from Likud would create "a political earthquake of unprecedented magnitude," according to the most popular Israeli newspaper, Yediot Aharonot. "Senior Likud officials believe that Sharon is about to smash the existing political establishment in Israel to pieces and build on its ruins a system that will crystallize and remain stable for years to come."

Well, maybe. Political analysts have speculated for some time on the formation of a centrist party that can pull together a generalized mood for negotiated progress with the Palestinians without sacrificing Israel's security.

The Likud rebels are likely to want to postpone elections until May, possibly with the help of parties like Shinui and Shas, which are not ready for elections. The right is worried that Mr. Sharon could make a coalition with Mr. Peretz's Labor Party and smaller centrist parties, leaving the nationalist camp unrepresented.

The polls that indicate support for a new Sharon-led party that would be likely to win 28 of 120 seats show Likud winning 18.

In another development, the European Union said it would dispatch a monitoring mission to help the Palestinians run the Rafah border crossing with Egypt, under a deal finished last week. The European team will eventually comprise some 40 observers to ensure that customs and entry procedures meet international standards.

It will be just in time: on Sunday, Israeli customs agents blocked a shipment from Gaza to Israel of a popular confection of chocolate and marshmallow called krembos. The illicit krembos displayed forged seals certifying that they were kosher. The chief rabbinate said that no kosher krembos were ever imported into Israel.