Israel’s prime minister, Binyamin Netanyahu, has announced he wants elections as soon as possible after dramatically dismissing two leading members of his cabinet, causing the collapse of his coalition.

Explaining his decision to seek the dissolution of parliament at a televised press conference, Netanyahu said he was “taking the risk [of early elections] in order to improve governance”. He condemned the instability of his most recent government, which he blamed for a lack of progress on a number of key issues.

Addressing Israelis, Netanyahu said: “I turn to you, the citizens of Israel, this evening because under the current situation, from within the current government, it is impossible to lead a state.

“My responsibility as prime minister is to do that. To preserve security, to develop the economy, to lower the cost of living – to take care of you, the citizens of Israel.

“These are things that I did over the course of four straight years in the previous government. I believe that was one of the best and most stable governments in the history of Israel.”

His decision to dismiss justice minister Tzipi Livni, Israel’s lead negotiator in the peace process, and finance minister Yair Lapid, follows weeks of mounting political tensions within Netanyahu’s increasingly dysfunctional coalition.

“In recent weeks, including the last 24 hours, ministers Lapid and Livni harshly attacked the government I’m heading,” Netanyahu said after ordering his cabinet secretary to deliver dismissal letters to the two ministers. “I won’t tolerate any more opposition within the government, I won’t tolerate ministers attacking from within the government’s policies and its leader.”

A statement from his office added: “The prime minister plans to call for parliament’s dissolution as soon as possible and to go to the people and get a clear mandate to lead Israel.”

The earliest that elections could happen under Israeli electoral law is March next year.

Those elections would be fought under new rules that include the threshold for party representation being increased – a move that pollsters have anticipated would see the disappearance of Livni’s Hatnuah party from the Knesset in any case.

A poll released by Channel 2 on Tuesday night suggested that Netanyahu’s Likud party would win the largest number of seats in the new Knesset with 22, followed by Naftali Bennett’s far-right Jewish Home on 17.

Livni presented the coming elections in stark terms. “The elections are not over zero VAT, but about whether there will be a Zionist or extremist country here,” she said.

“Can the centre camp present a realistic alternative for replacing the government in Israel? For this to happen, we need all the forces to unite and present such an alternative.”

In theory, rival centre and left parties could have made a bid to form an alternative government, but ahead of his move Netanyahu had sought the backing of ultra-orthodox political parties to support the dissolution of parliament and new elections instead.

Livni and Lapid had clashed with Netanyahu on a number of controversial issues, most recently a proposed “Jewish nation state” law that critics have argued would have promoted Jewish national rights while eroding Israel as a democracy.

The divisions within the cabinet had come to a head since the weekend, when Netanyahu – in consultation with fractious cabinet members – delivered an ultimatum warning them to back his leadership or leave the government.

Livni and Netanyahu had met earlier on Tuesday after a frosty meeting the evening before between the prime minister and Lapid.

At the end of their meeting, Livni remarked that “already yesterday at midnight it was clear that we’re going to elections.

“Netanyahu and I came from the same political home, but each of us took it in a different direction,” said Livni, who served as an MP and minister in Likud governments before joining Kadima – the party set up by late prime minister Ariel Sharon – and accusing the Likud party of moving every more sharply to the right.

The late Monday meeting between Netanyahu and Yesh Atid’s leader Yair Lapid followed weeks of sparring between the sides over budget provisions, including an increase for the Ministry of Defense, and Yesh Atid’s opposition to the current version of the contentious bill that would enshrine Israel’s status as a Jewish state.

Netanyahu has “decided to take Israel to unnecessary elections”, Lapid told an economic conference on Tuesday, adding that despite Israel’s 50-day war with Hamas militants over the summer, its problems with a highly militarized Gaza Strip still remain.

Lapid has also said he believes that Netanyahu has veered too far to the right by pushing Jewish settlement in east Jerusalem and the West Bank, and failing to advance the peace process with the Palestinians.

“Netanyahu has chosen to go to elections when the situation is particularly difficult,” said Yesh Atid’s Yaacov Peri, the science minister.

“There is a crisis with the United States and the condition of the middle class is deteriorating.”

However, Netanyahu can fill out the remainder of his two-year term even without the support of Yesh Atid, by bringing ultra-orthodox parties into his government.

But those parties have so far shown no willingness to join him, apparently preferring the alternative of an early poll.

Chairman Danny Danon of Netanyahu’s Likud party blamed “the amateurish antics of Yair Lapid” for “dragging Israel to an unnecessary, and expensive, early election”

“After the Likud is victorious at the ballot box, we must be sure not to repeat mistakes of the past and form the next coalition government with loyal and like-minded parties that are interested in serving as true partners in leading our great country,” he said.

That suggests a far-right coalition, with a major emphasis on Jewish settlement and Jewish-oriented legislation.

Recent polls have suggested that Netanyahu, despite declining popularity, could win enough votes to form a new right-wing/far-right coalition with the support too of the ultra-orthodox haredi parties without needing to rely on centrist parties as he did in the current coalition.

However there are a number of issues that could potentially derail that ambition. A coalition that relies on the support of the ultra-orthodox would be unpopular with many Israelis, while a wild card is Moshe Kahlon, a popular former Likud minister who is launching his own new party that some polls believe could take seats in double numbers.