Hours before Israel's political parties finalized their Knesset lists on Thursday, former Labor chairman Amir Peretz, placed third on the Labor party list, announced that he was leaving the party and joining Tzipi Livni's fledgling Hatnuah ("The Movement") party. He is expected to be ranked No. 3 on Livni's list as well.

Peretz's dramatic departure came just as escalating tensions between him and Labor Chairwoman Shelly Yachimovich threatened to tear the party apart. The main point of contention between the two colleagues, who once had nothing but praise for each other, was Peretz's demand that Yachimovich publicly promise not to join a coalition led by Prime Minister Benjamin Netanyahu after the upcoming election. Yachimovich, though she does not plan to join such a coalition, refused to make this commitment, or to take orders from Peretz. She further suggested that Peretz was sabotaging the party by instigating infighting.

Livni, the former chairwoman of Kadima who recently announced the establishment of a new party called Hatnuah ("The Movement"), convened a press conference on Thursday to announce her new acquisition, calling Peretz "a man who decided to translate his concern for Israel into courageous action."

"These days we are facing diplomatic challenges as our government leads Israel with reckless decisiveness into diplomatic isolation," Livni told reporters. "Israel's closest friends are turning their backs on us. They believe in Israel, but they oppose this government's policies — as do I. That is why we established Hatnuah, to offer an alternative to this extremist government that is dragging Israel down in every respect."

Rather than criticizing the government, Peretz chose to criticize Yachimovich: "Yachimovich always rejected my outstretched hand. She has every right to decide how to conduct herself, but she has no right to abandon the [party's] diplomatic vision. In every election, the voters elect on the main issue, the engine — this time the issue of social justice was selected. This engine has tremendous energy, but it doesn't have enough room for the hundreds of thousands of citizens who want to join this journey. This engine needs to be joined by the diplomatic issue."

"This was the first time that I've ever experienced unprovoked hatred from within my own party, from my partners," Peretz went on to say. "What were they upset about? That I was pursuing peace?"

"We will build a social and diplomatic Iron Dome," Peretz promised, referring to the anti-missile defense system that recently gained glory during the latest round of fighting with the Palestinians. Early on, Peretz had pushed for the Iron Dome development despite massive opposition. "I turn to you, the citizens of Israel: Come join the battle and together we will bring peace," he said.

Peretz's move is unlikely to improve the prospects of the center-left bloc. Prime Minister Benjamin Netanyahu and his hawkish allies are expected to form the next government.

Peretz's departure from Labor comes amid reports of recent efforts to unite Livni's Hatnuah and Yachimovich's Labor into one list. Sources within both parties confirmed that talks had been underway, but Livni's associates later insisted that the reports were a product of "Yachimovich's spin."

Meanwhile, the Labor camp was not pleased with Peretz's last minute defection. "Peretz betrayed the party," said on party official.

The Labor Party issued a statement following the announcement, saying "We are bidding goodbye, with a sigh of relief, to a man who tried to sabotage the party at the height of its success, and failed."

"Peretz joining Linvi won't harm Labor, in fact it will only strengthen us and allow us to work together in unity, friendship and without damaging subversion from within, in our efforts to unseat Netanyahu's government and turn Israel into a just society," the statement said.

The statement also criticized Livni, adding "this is yet another political low in [Livni's] collection of refugees, which does not contain even an iota of ideology."

Labor MK Eitan Cabel, considered a close associate of Peretz, voiced his astonishment following the announcement, telling Army Radio that "I am in shock. There is no explanation for what he did."

"This move was a morally and ethically wrong," Cabel said. "Only a week ago, Labor's voters gave him extensive support (in the party primary) and he chose to throw that away."

"Labor has been, and still remains, the only alternative to Netanyahu, with or without Peretz," Cabel concluded.