Palestinian political and military resistance movement Hamas condemned the Palestinian government’s resignation on Tuesday, calling for a national unity government.
President Mahmud Abbas’ political party Fatah officials said, they had begun consultations regarding forming a new government.
No time frame was announced.
President Mahmud Abbas move is seen as a bid to strengthen his position.
Split between the Palestinian political parties is deepening and decade-old.
The new government is expected to be made up only of parties that are members of the Palestine Liberation Organisation.
Fatah is in control of West Bank. Hamas runs the Gaza Strip.
Abbas has taken a series of punitive measures in recent years to try to force Hamas to hand over the reins of power in Gaza.
Hamas spokesperson Fawzi Barhoum said in a statement, Palestinians need a national unity government.
Analysts say Abbas is seeking to establish a separatist government to serve his interests and replacing prime minister Rami Hamdallah after five years as part of efforts to isolate political rivals Hamas.
The Palestinian Authority asked the United Nations to deploy a permanent international force in the occupied West Bank and east Jerusalem.
Israel captured the West Bank and east Jerusalem in the 1967 war.
The Palestinians want both to be part of their future state and other areas as per the United Nations Resolutions.