Israeli politicians have voted to dissolve parliament, a day after Prime Minister Benjamin Netanyahu sacked two key ministers critical of his policies, paving the way for early elections.

The current government, which took office in early 2013, has been riven by divisions from the beginning over major issues facing the country.

Wednesday's vote in the 120-member Knesset, which passed 84-0 with one legislator abstaining, was an initial step. 

Further votes are expected next week that will officially dissolve Israel's parliament and usher in new polls. If the votes pass as expected, the current parliament will have served for one of the shortest periods in the country's history.

Yuli Edelstein, the speaker of Israel's parliament, said party representatives had agreed on March 17 as the date for the early elections. 

On Tuesday, Netanyahu fired Finance Minister Yair Lapid and Justice Minister Tzipi Livni and called for elections, plunging the country into a bitter campaign in the run-up to the polls early next year.

Benjamin Netanyahu dismissed ministers Tzipi Livni (right) and Yair Lapid (left) on Tuesday [AFP]

In a procedural step, the date for new elections must still be approved by each party.

"The coming elections are about one question: who will lead the government amid the huge challenges that Israel faces?'' Netanyahu told a meeting of his Likud party.

"The Likud is the only party that should be considered."

Opposition leader Isaac Herzog said his centre-left Labor party would "do everything to bring change and hope to Israel".

The election would come at a time of growing violence between Palestinians and Israelis, and deepening despair over prospects for peace.

Labor, a traditional force in Israeli politics that has lost support in recent years, is poised to pull in 13 seats, according to the early polls.

The polls were conducted separately for Israeli Channel 2 and Channel 10 on Tuesday. The Channel 10 poll surveyed 545 people and had a margin of error of 4.3 percent. The Channel 2 poll asked 500 people and had an approximate margin of error of 3.4 percent.

Netanyahu's fractious centre-right Cabinet has been bickering for weeks over the budget, a housing tax break and a bill that would enshrine into law Israel's status as a Jewish state. Rising violence between Palestinians and Israelis has also been an issue, as have the government's Jewish settlement policies in the occupied West Bank.

Source: Agencies