Shimon Peres, the Israeli Prime Minister, told Warren Christopher, the US Secretary of State yesterday that he planned to call early Israeli elections on 28 May, according to diplomats.
The formal announcement is expected next week. Mr Peres is believed to have decided last week to move the elections forward from October.
The reason for the change of date is that Mr Peres and Labour believe that they can win while the right is still damaged by the assassination of Yitzhak Rabin, the Prime Minister, on 4 November.
The withdrawal of Israeli forces from the main West Bank towns and the Palestinian elections in January have gone smoothly, leading to 59 per cent of the voters saying they support the Oslo accords.
This is a big change from last summer, when the Israeli electorate was evenly split. However, a resumption of the suicide bombing campaign by Islamic militants against Israeli targets could yet lose Mr Peres and Labour votes. They would have stood an even better chance of victory if Mr Peres had called an election immediately after the assassination.
In the latest opinion poll Mr Peres has a lead of only 6 percentage points over Benyamin Netanyahu, the leader of the main right-wing party, Likud. Although peace negotiations with the Palestinians have gone well and the economy is buoyant, Mr Peres has failed to lead the Labour party to victory in four previous elections.
The Prime Minister and the Knesset (parliament) will be elected separately for the first time under new constitutional arrangements.
The opposition will try to focus its campaign on the negotiations - still stalled - on Israeli withdrawal from the Golan Heights in return for a peace agreement with Syria. The peace talks with Damascus - the reason for Mr Christopher's trip to the Middle East - are not popular in Israel.
Likud is, however, seeking to play down its previous hostility to the Oslo accords, which led to the agreements on Palestinian autonomy in the West Bank and Gaza. Likud is split on the peace process but now recognises that its image as an anti-peace party will lose it votes. Some senior Likud members say that the party should accept Oslo, while arguing that, as hardliners, they are better placed than Labour to negotiate the final phase of the peace process, which will cover Jerusalem, Israeli settlers, borders and Palestinian refugees.
Mr Peres refused later to confirm the election date. But he told Israeli Radio: "On the issue of the elections, I announced that I would make an announcement next week and I am standing by that announcement."
Mr Christopher said on Tuesday after talks with President Hafez al-Assad of Syria that Israeli-Syrian talks would resume on 26 February near Washington, whether or not Israel called early elections.