David Levy to form own party, run for prime minister in 96

Levy's announcement, made on Israel Television over the weekend, comes after years of feuding with Likud chairman Benjamin Netanyahu.

The conflict reached a climax earlier this year, when Levy bolted from Likud, charging that its mechanism for holding internal party elections deprived his followers of their fair share of representation within the party.

Many who support Levy, a Moroccan-born immigrant, are from Israel's Sephardi population.

Levy said his new, as-yet-unnamed party would be centrist, drawing support from members of the Likud, Labor and Meretz parties.

Sources close to Levy said the new party would support the evolving peace agreement with the Palestinians, with the condition that no Israeli settlements be dismantled and that the security of Jewish settlers be ensured.

Senior Likud sources said the driving force behind Levy's decision to form a new party was to thwart Netanyahu's bid for the premiership.