Jerusalem ? Israeli Prime Minister Ariel Sharon and his main political rivals agreed Thursday to hold elections early next year, a decision likely to freeze any plans to capitalize on Israel’s Gaza withdrawal to restart Mideast peace talks.

Sharon, who remains Israel’s most popular politician, had resisted moving up the election scheduled for next November but changed his mind after the Labor Party threatened to bolt the coalition, putting the survival of his government in doubt.

A series of urgent election-related meetings on Thursday overshadowed a fresh, hard-won agreement reached two days earlier on reopening the vital Gaza-Egypt crossing, illustrating that until a new government is in place, Israeli leaders will be concentrating on domestic politics instead of peacemaking.

Palestinians are also preparing to head into an election season, with parliamentary balloting set for Jan. 25, featuring candidates from the Islamic militant group Hamas for the first time, mounting a serious challenge to Palestinian leader Mahmoud Abbas.

There had been hopes that the pullout from the Gaza Strip would jump-start efforts toward a full peace accord between Israel and the Palestinians, but the intervening weeks were dominated by haggling over the border crossing – an issue finally resolved with the direct intervention of Secretary of State Condoleezza Rice.

A Palestinian man leads a donkey cart past an Israeli armored personnel carrier across the Beit Iba checkpoint near the West Bank town of Nablus Thursday. Peace talks will most likely be postponed now that Israel has announced spring elections.

The surprise selection last week of fiery union leader Amir Peretz as Labor Party leader and candidate for prime minister also threw the Israeli political world into turmoil. Peretz campaigned on a promise to force new elections.

Peretz and Sharon met Thursday and agreed to move up the election. Peretz said Sharon would call the poll for late February or sometime in March, meaning a relatively short campaign in Israeli terms. Formation of a new government could take up to two months after that.

Joseph Lapid, head of the opposition Shinui Party, met with Sharon later Thursday and said they agreed on a March ballot.

“On the one hand, we want to shorten the process, but on the other, we have to give time to prepare for elections, and so we agreed they would be in March,” Lapid told The Associated Press.