The Knesset gave overwhelming final approval for early elections on May 17
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CNN's Jerrold Kessel reports from Jerusalem
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JERUSALEM (CNN) -- Israel's parliament on Monday fixed a May 17 date for early elections, sealing an end to a government bitterly divided over peace with the Palestinians.

The Israeli legislature, the Knesset, fought off last-ditch opposition by right-wing members and gave overwhelming final approval to the early poll, which cuts short the administration of Prime Minister Benjamin Netanyahu by 18 months.

Netanyahu will remain as prime minister of a caretaker government until the new elections are held.

The Israeli leader had lost support from both hard-line conservatives in his government and opposition Labor Party members. Hard-liners were angry with Netanyahu for agreeing to turn over additional land to Palestinians in October's Wye River accords. Opposition members turned against Netanyahu when he suspended those same accords a few weeks later, citing security concerns.

"This (decision for early elections) is a result of the failure of Benjamin Netanyahu's government in the past two and a half years," declared Labor legislator Yossi Beilin.

Candidates prepare for election

Labor leader Ehud Barak shook hands with supporters and hugged bitter party rival Haim Ramon after the vote.

Barak led Netanyahu in an opinion poll published Monday in the newspaper Maariv, 51 percent to 41 percent.

But a possible wild card in the election is former army Chief of Staff Amnon Lipkin-Shahak, who has been negotiating to form a centrist party. Lipkin-Shahak has called a news conference for Wednesday.

But violence also may be a factor in the campaign.

Palestinian militants are suspected of opening fire on a van of Jewish settlers in the West Bank city of Hebron on Monday, wounding two Israeli women. The Israeli army responded by slapping a curfew on thousands of Palestinians in the area who live under Israeli control.

Recent violence in Hebron has created a peculiar atmosphere for the upcoming campaign

Netanyahu issued a statement saying he had sent Palestinian leader Yasser Arafat a "strong message" demanding the capture of the attackers.

The violence, coupled with an overall lack of confidence in the government's ability to secure true peace, have created a peculiar atmosphere for the upcoming election campaign.

"Lack of hope, a change from optimism to pessimism, is the most dominant factor today in Israel," said political consultant Eyal Arad.

Correspondent Jerrold Kessel, The Associated Press and Reuters contributed to this report.