BY Matthew Price
BBC News, Ramallah
This is the first time that Palestinian Authority President Mahmoud Abbas has publicly called for fresh parliamentary and presidential elections.
Mr Abbas' speech was eagerly watched on the Palestinian street
As president, however, Mr Abbas does not have authority to order the new elections and he has referred the matter to the Palestinian election commission to see whether or not they can be held.
That will become clearer in the coming days and weeks.
But Mr Abbas' call for elections is a dangerous political move.
It comes at a time when inter-factional violence between his own Fatah faction and Hamas has left several Palestinians dead in Gaza and the West Bank.
A senior Hamas leader rejected Mr Abbas's call for early elections, saying that would be tantamount to a coup.
The tension between the two main Palestinian political factions has been growing ever since Hamas' stunning electoral victory over Fatah earlier this year.
A Hamas-led administration took power in March but has been crippled by an international economic boycott imposed because the faction calls for the destruction of the state of Israel.
Mr Abbas painted himself as someone who has worked tirelessly for the Palestinian cause in the last year only to be thwarted by Hamas
Fatah, on the other hand, recognises the Jewish state.
The boycott has meant that ten of thousands of Palestinian government workers have not received their full salaries over the past 10 months.
For months the two factions held talks to try to resolve the political and economic crisis by forming a national unity government. They hoped that this would end the boycott.
But in the last few weeks it has become apparent that Fatah and Hamas are as far apart as ever and no deal is in sight.
In his speech, Mr Abbas said that the door is still open to form a national unity government.
But he also lambasted Hamas for being responsible for the failure of talks, saying the group's positions were unrealistic.
Mr Abbas has struggled to improve relations with Hamas
Mr Abbas painted himself as someone who has worked tirelessly for the Palestinian cause in the last year only to be thwarted by Hamas.
This is unlikely to play well with Hamas supporters.
Earlier this week, some Hamas officials accused a senior Fatah official of being behind what they said was an assassination attempt on the Hamas Prime Minister Ismail Haniya.
With the growing political polarisation, many Palestinians fear that there will be greater bloodshed on the streets.
But both Hamas and Fatah leaders stress that it is in neither faction's interest - nor the interests of the Palestinian people - for more inter-factional violence.
Mr Abbas's election call, however, is unlikely to ease the tensions.
If early elections do go ahead - and that is not guaranteed - then there is a strong possibility that Hamas supporters will boycott them.
And none of the tensions between Fatah and Hamas will have been resolved.