The ruling party in divided Ivory Coast says it is pulling out of both the transitional government and talks on the divided nation's future.
Government supporters held another day of protests at what they see as interference by the UN and France.
UN Secretary General Kofi Annan urged an immediate end to what he called orchestrated violence.
But the ruling party's leader said the world had failed in Ivory Coast and he said French and UN troops should leave.
The BBC's James Copnall in Ivory Coast's main city, Abidjan, says the protesters now control virtually all the main streets there.
In the west of the country, around 1,000 protesters invaded and occupied a UN base at Guiglo.
Ivory Coast has been divided since September 2002, when rebels seized the north.
Supporters of President Laurent Gbagbo are angry at international mediators calling for the dissolution of the parliament, which largely backs him.
The mediators were appointed by the UN to help steer the country towards elections, due this year.
The Ivorian Popular Front (FPI) accused the international community was carrying out a "constitutional coup d'etat".
Its leader, Pascal Affi N'Guessan, said the seven FPI ministers would withdraw from the government of national unity set up under UN auspices.
He said a "government of liberation" should be set up, to kick out the rebel New Forces in the north.
Our correspondent says this is the biggest test Prime Minister Charles Konan Banny has faced since his appointment last month.
Mr Konan Banny must regain control of a situation which is slipping out of his hands, our correspondent adds.
Youths supporting Mr Gbagbo - the "Young Patriots" - now control virtually all the main streets in Abidjan.
Schools and shops were again closed in the city centre on Tuesday while UN vehicles were stoned.
Tear gas was fired after crowds broke through the outer fence at the UN compound.
In Guiglo, some 1,000 protesters forced Bangladeshi UN peacekeepers to take down the flags of Bangladesh and the UN, and replace them with an Ivorian one.
However, it was all done relatively peacefully, our correspondent says.
There were similar protests in other towns of the government-controlled south.
Elections due last October were postponed because of the continued instability.
Gbagbo supporters say foreigners want to gain control
Our correspondent says the national assembly is one of Mr Gbagbo's last power bases.
Mr Gbagbo's supporters, he adds, feel that if parliament's mandate is not renewed it will mean that foreigners are imposing their will on Ivory Coast.
The former ruling PDCI has also condemned the idea of dissolving parliament.
Analysts say the international working group's move was intended to strengthen Prime Minister Banny's authority and ensure that hostile deputies did not block attempts to implement the peace process, as happened last year.
The Young Patriots have attacked French citizens in the past, most notably in November 2004 when more than 8,000 Westerners were evacuated.
Some 10,000 French and African peacekeepers are in Ivory Coast.