Turkish Prime Minister Ahmet Davutoglu said Thursday that coalition talks with the main opposition Republican People's Party (CHP) had ended in failure, and that early elections were now a strong possibility.

"We have not been successful in assuring a favorable base for the creation of a government," he told reporters. "There is a strong possibility of appealing to the national will," he added in reference to new snap polls, following the inconclusive June 7 elections.

Davutoglu, who belongs to Turkey's ruling AK Party, held a 1.5-hour meeting in Ankara with Kemal Kilicdaroglu, leader of the secular CHP, in a last-ditch effort to agree on a grand coalition after weeks of talks between their parties. But a senior CHP official, who spoke with Reuters by phone, said that “the outcome is negative.” The official did not offer further details.

The development pushes Turkey into political uncertainty at a time when it is faced with a sharp surge of violence and is engaged in a major military offensive against fighters of the Kurdistan Worker's Party (PKK). But President Recep Tayyip Erdogan, who founded the ruling party, is reported to prefer new elections in the hopes that the party can win back its majority. Officials say the party's grassroots is also opposed to a coalition with the pro-secular party.

On Wednesday, Erdogan spoke of the need for a strong rule, and said Davutoglu "would not commit suicide" if no coalition is formed. Erdogan had earlier insisted that forging a coalition without the principles of both sides matching would amount to suicide, Turkey's Zaman newspaper reported.

The AKP could now try to strike a coalition agreement with the nationalist opposition MHP, but a senior ruling party official told Reuters that the chances of such a deal were “very slim,” and that a snap election in November was a high probability.

The country’s lira currency weakened to a record low of 2.82 to the dollar on the news, and stocks fell sharply. Many investors had hoped for a deal between the AKP and the pro-business, center-left CHP, and fear another election will serve only to prolong uncertainty.

The AKP failed to win a parliamentary majority in an election on June 7, leaving it unable to govern alone for the first time since it came to power in 2002.

Davutoglu has until Aug. 23 to find a junior coalition partner, or Erdogan could call a snap election.

The MHP has said it does not favor a coalition with the ruling party, but has hinted it could support a minority AKP government in the short term in return for a new election.

Erdogan has made clear he favors single-party government in Turkey and has made no secret of his ambition to change the constitution and create an executive presidency, virtually impossible without a strong AKP majority.

Al Jazeera and wire services