Israel’s defence minister Avigdor Lieberman has announced his resignation and called for early elections in protest of a controversial truce with Gaza, plunging the government into turmoil.

Mr Lieberman convened his Yisrael Beiteinu parliamentary faction on Wednesday afternoon to make the statement. He later confirmed his right-wing party would also be leaving prime minister Benjamin Netanyahu’s coalition, leaving it with just a one-seat majority in the Knesset.

Speaking to reporters after the meeting, Mr Lieberman called a ceasefire truce with Gaza a “capitulation to terror” and something he could not stand for.

Militants in the besieged strip announced an Egypt-brokered ceasefire on Tuesday night after pounding Israel with more than 460 rockets and mortars in the heaviest night bombardment since the 2014 war.

Fighting had erupted the day before after a botched Israeli covert operation in south Gaza turned into a firefight, leaving seven Palestinians and an Israeli lieutenant colonel dead.

Israel responded to the rocket fire by striking more than 160 targets in Gaza, sparking fears both sides were on the brink of a new war.

Mr Lieberman said on Wednesday he could not stay in his post while the truce was in place.

“What happened yesterday – the truce combined with the process with Hamas – is capitulating to terror. It has no other meaning,” Mr Lieberman said.

“What we’re doing now as a state is buying short-term quiet, with the price being severe long-term damage to national security,” he added.

Mr Lieberman is believed to be one of four ministers who opposed ending strikes in Gaza during a six-hour security cabinet meeting on Tuesday.

On Wednesday he slammed the military’s response to the rocket fire. “To put it lightly, our response was drastically lacking to the 500 rockets fired at us,” he said.

“We should agree on a date for elections as early as possible,” he added.

Elections are not due until November 2019, but Mr Lieberman’s resignation increases the likelihood of an earlier vote.

Mr Lieberman’s Yisrael Beiteinu party, which holds five seats in the 120-seat Knesset, was a key part of Mr Netanyahu’s coalition, which will limp into an election if it is called early.

The prime minister now has only 61 seats in the Knesset, which is the smallest possible majority.

Gaza crisis: heavy cross-border fire in pictures Show all 23 1 /23 Gaza crisis: heavy cross-border fire in pictures Gaza crisis: heavy cross-border fire in pictures A ball of fire above the building housing the Hamas-run television station al-Aqsa TV in the Gaza Strip during an Israeli air strike AFP/Getty Gaza crisis: heavy cross-border fire in pictures Israeli Iron Dome anti-missile systems firing toward missiles fired from the Gaza Strip near the southern city of Sderot, Israel. Israeli army report that approximately 300 missile launches were identified from the Gaza strip toward Israel. Dozens of launches were intercepted by the Iron Dome aerial defense system EPA Gaza crisis: heavy cross-border fire in pictures Israeli soldiers take cover near the Israel Gaza border AP Gaza crisis: heavy cross-border fire in pictures A bus set ablaze after it was hit by a rocket fired from the Gaza Strip. Israel's military said it was carrying out air strikes "throughout the Gaza Strip" on Monday after rocket fire from the Palestinian enclave towards its territory AFP/Getty Gaza crisis: heavy cross-border fire in pictures Palestinians inspect a rubble of a destroyed internal security building of Hamas interior ministry after Israeli air strike in Gaza City EPA Gaza crisis: heavy cross-border fire in pictures A Palestinian girl walks up the stairs of her family house that was damaged in an Israeli air strike REUTERS Gaza crisis: heavy cross-border fire in pictures Fire and smoke billow following Israeli air strikes targeting Rafah in the southern Gaza Strip, near the border with Egypt AFP/Getty Images Gaza crisis: heavy cross-border fire in pictures Missiles from Israel's Iron Dome air defence system in the south of Israel destroy incoming missiles AFP/Getty Images Gaza crisis: heavy cross-border fire in pictures Israeli security forces and firefighters gather near abuilding set ablaze after it was hit by a rocket fired from the Gaza Strip, in the southern Israeli town of Sderot AFP/Getty Gaza crisis: heavy cross-border fire in pictures epa07162276 A Palestinian girl stands between the rubble of her family house close a destroyed building of Al-Aqsa channel belonging to Hamas movement after Israeli air strike in Gaza City, 13 November 2018. According to reports, Palestinian militants fired 300 rockets and mortars at Israel from the Gaza Strip. The Israel army responded with strikes on what it said were targets belonging to Hamas and Islamic Jihad. EPA/MOHAMMED SABER MOHAMMED SABER EPA Gaza crisis: heavy cross-border fire in pictures A picture taken on November 12, 2018 shows a ball of fire above the building housing the Hamas-run television station al-Aqsa TV in Gaza City during an Israeli air strike. - Israel's military said it was carrying out air strikes "throughout the Gaza Strip" after rocket fire from the Palestinian enclave towards its territory. (Photo by Bashar TALEB / AFP)BASHAR TALEB/AFP/Getty Images BASHAR TALEB AFP/Getty Images Gaza crisis: heavy cross-border fire in pictures A ruble of a destroyed building of Al-Aqsa channel belonging to Hamas movement EPA Gaza crisis: heavy cross-border fire in pictures Israeli security forces and firefighters gather near a bus set ablaze after it was hit by a rocket fired from the Palestinian enclave AFP Gaza crisis: heavy cross-border fire in pictures Relatives of Mohammed Ouda, killed in an Israeli air stike the previous day, mourn during his funeral in Beit Lahia in the northern Gaza Strip AFP/Getty Images Gaza crisis: heavy cross-border fire in pictures Missiles from Israel's Iron Dome air defence system in the south of Israel destroy incoming missiles fired at Israel from the Palestinian enclave AFP/Getty Images Gaza crisis: heavy cross-border fire in pictures Israeli soldiers sit atop a Merkava tank stationed along the Israeli border with the Gaza Strip AFP/Getty Images Gaza crisis: heavy cross-border fire in pictures Black smoke rises as an Israeli airstrike hits a residential building in Gaza City AP Gaza crisis: heavy cross-border fire in pictures Palestinians look out of their house that was damaged in an Israeli air strike REUTERS Gaza crisis: heavy cross-border fire in pictures Palestinians hold placards and the Palestinian flag during a protest in solidarity with Gaza, in the West Bank city of Hebron EPA Gaza crisis: heavy cross-border fire in pictures An Israeli policeman inspects the damage in a building caused a day earlier by a rocket fired from the Gaza Strip, in the southern Israeli town of Ashkelon AFP/Getty Images Gaza crisis: heavy cross-border fire in pictures A Palestinian boy inspects the rubble of a destroyed residential building after Israeli air strike in Gaza City EPA Gaza crisis: heavy cross-border fire in pictures A man stands inside a house damaged by a rocket fired from the Gaza Strip overnight, in the Israeli city of Ashkelon November 13, 2018. REUTERS/Ronen Zvulun TPX IMAGES OF THE DAY RONEN ZVULUN REUTERS Gaza crisis: heavy cross-border fire in pictures Palestinians survey a destroyed residential building hit by Israeli airstrikes, in Gaza City, Tuesday, Nov. 13, 2018. (AP Photo/Hatem Moussa) Hatem Moussa AP

In the past, Mr Netanyahu has warned that 61-strong coalition would “not be stable”.

He stands to lose even this. The far-right party of Naftali Bennett, the country’s education minister, said if he was not appointed defence minister, it would also quit the coalition, taking with it eight seats.

Yair Lapid, head of the opposition Yesh Atid party, said “the countdown has begun” to the end of Mr Netanyahu’s term in office.

A senior source within Mr Netanyahu’s Likud party warned there was “no need to go to elections at this time of sensitive security”. The source added the defence portfolio would be transferred to the prime minister, giving him sweeping powers.

Mr Netanyahu already holds the positions of foreign minister, prime minister and health minister.

He finally broke his silence on the deal on Wednesday, saying Gaza’s militant Hamas rulers “begged for a ceasefire and they know why”.

“In times of emergency, when making decisions crucial to security, the public can’t always be privy to the considerations that must be hidden from the enemy,” he said at a ceremony on Wednesday morning in honour of Israel’s founding father David Ben-Gurion.

In Gaza, Hamas, the militant group that runs the besieged enclave, celebrated Mr Lieberman’s resignation as “recognition of defeat against Palestinian resistance”.

Dozens of rockets being fired from Gaza at Israeli civilians

On Tuesday night, thousands of Hamas supporters took to the streets to revel in the ceasefire that they see as a significant win.

In southern Israel, hundreds gathered in Sderot, which received the worst of the rocket fire, to protest against the end of airstrikes on Hamas positions, warning that a truce would only encourage the militants to strike again.

“Tens of thousands of us have been living through a warzone for 18 years. We are frustrated with the government that has not done anything,” said Stav Cohen, who has lived in the border town her whole life.

“We feel we are not being heard. That not enough is being done for us. That our pain cannot be ignored. We have been left with the financial and emotional ruins. People are traumatised,” she added.

Gaza’s health ministry confirmed that seven Palestinians in Gaza had been killed and 25 wounded by Israeli airstrikes since the cross-border flare-up erupted on Monday.

A barrage of rockets on Israel had killed one person, a 48-year-old West Bank Palestinian man, and injured 27 other others, including three severely.

The Israeli military said on Wednesday a Gaza fisherman – identified locally as Nawaf al-Aatar, 20 – was killed by Israeli fire in north Gaza because he was illegally advancing towards the security fence dividing Gaza and Israel.

Israel and Gaza have fought three wars since 2008 but fears were raised of a fourth amid protests and clashes along the border fence the two sides share.