Jailed Palestinian leader Marwan Barghouti will not run in the Palestinian presidential election, an official says.
Israel jailed Marwan Barghouti for complicity in a string of murders
Instead, Mr Barghouti has lent his support to Mahmoud Abbas - candidate of the ruling Fatah party.
The jailed activist was said to be considering challenging Mr Abbas in January's presidency elections.
But Palestinian cabinet minister Kadura Fares said Mr Barghouti pulled out to avoid a split in Fatah.
Mr Barghouti "is calling upon the sons of the movement and his supporters to support the movement's nominee Mahmoud Abbas," Mr Fares said Friday after visiting Mr Barghouti earlier in his Israeli prison cell.
The announcement comes amid efforts to fend off a split in the Fatah political movement over who succeeds veteran leader Yasser Arafat, who died earlier this month.
However, it is likely that Barghouti will run in Fatah's internal elections on August 4 - its first for 16 years.
The elections date was announced after the prison meeting.
The Fatah election, which will produce new members for the party's central institutions, is being seen as an attempt to placate rival factions.
The BBC's Alan Johnston in Jerusalem earlier said a contest might well split Fatah between younger Palestinians, who back the more charismatic Mr Barghouti, and the older guard, who support Mr Abbas.
Mr Abbas - a former Palestinian prime minister - was nominated as Fatah's candidate for the presidential elections in January.
Charismatic and determined
Mr Abbas, also known as Abu Mazen, has already replaced Mr Arafat as Palestine Liberation Organisation (PLO) chairman and is now favourite to succeed him as president.
Barghouti, currently serving five life sentences on terrorism charges in an Israeli prison, would have had to run as an independent.
But it is believed that he is the most popular Palestinian leader. He is seen by many as a hero and a major figure in the fight against Israeli occupation, our correspondent says.
He has been described as charismatic and determined, and was often thought of as a natural successor to Arafat, our correspondent adds.
The nomination of Mr Abbas came at a Fatah Revolutionary Council meeting in the West Bank city of Ramallah on Thursday night.
Palestinian official Tayeb Abdel said Mr Abbas was now "the only candidate of the Fatah movement", the Associated Press news agency reported.
Our correspondent describes Mr Abbas as very much the kind of man that Israel and the West would like to see emerge as the new leader.
Mr Abbas is a moderate who has opposed the armed struggle against Israel, but he is a rather grey figure who lacks a popular following, our correspondent says.