Lebanon's caretaker Prime Minister, Saad Hariri, has said he is withdrawing his candidacy for the premiership.
Mr. Hariri resigned almost a month ago in response to large-scale anti-government protests fuelled by anger at the ruling elite over the ailing economy and rampant corruption.
He said on Tuesday that he hoped his decision would prompt parliamentary blocs to quickly agree on a replacement.
Overnight, there were clashes between rival factions in the capital, Beirut.
The mass demonstrations have been largely peaceful since they erupted on 17 October. But with no resolution in sight, many people fear the political crisis could become increasingly violent.
The UN Security Council has called on all sides to exercise restraint.
Mr. Hariri submitted his resignation on 29 October, saying he had hit a "dead end" in trying to resolve the political crisis.
President Michel Aoun asked him to stay on in a caretaker capacity until the heads of the various parliamentary blocs had chosen a new prime minister - a post that is reserved for a Sunni Muslim under Lebanon's sectarian power-sharing system.
Mr. Hariri initially did not rule out a return but insisted that he wanted a cabinet filled with technocrats who could help solve Lebanon's problems.
Earlier this month, the business tycoon and former finance minister Mohammed Safadi emerged as a possible replacement.
But Mr Safadi soon withdrew his candidacy, saying it would be difficult to form a "homogeneous government which would have the support of all political rivals". Protesters also rejected him as a member of the ruling elite.
On Tuesday, Mr Hariri said he hoped that his decision to step aside would help break the deadlock and that the government Lebanon needed would be formed.
"I am sticking by the rule 'not me, rather someone else' to form a government that addresses the aspirations of the young men and women," he said in a statement.
"I have full hope and confidence after announcing this clear and decisive decision that the president of the republic... will immediately call the binding parliamentary consultations to appoint a new prime minister," he added.
There was no immediate response from Mr. Aoun, who has so far held off on holding the binding consultations required under Lebanon's constitution. But sources at the presidential palace told Reuters news agency that he planned to hold consultations on Thursday.
Mr. Hariri's announcement came after the second night of clashes in Beirut.
Supporters of Mr Hariri's Future Movement - the biggest Sunni Muslim-led party - confronted those of Hezbollah and Amal - the two biggest Shia groups - underneath the Cola bridge late on Monday. A video posted online showed gunfire erupting as groups of men on motorcycles drove around the area.
Police and soldiers separated the two sides and no injuries were reported.
Security forces also had to intervene on Sunday night when Hezbollah and Amal supporters ransacked and destroyed tents at roadblock set up by protesters at a key road junction in the capital.
In a separate incident, two people were killed when their car hit a barrier reportedly erected by protesters on a highway linking Beirut with the south of the country.
Hezbollah said the deaths were the result of "a militia-style attack by bandits, who have been practicing the most heinous methods of humiliation and terror against innocent citizens", and warned of the "threat to civil peace and social stability".
Members of the UN Security Council called on all actors to "conduct intensive national dialogue and to maintain the peaceful character of the protests by avoiding violence and respecting the right to peaceful assembly and protests".
They also emphasized the need for the authorities to "implement meaningful economic reforms in a timely fashion and under a Lebanon-owned and -led process".
The protests have been the largest seen in Lebanon in more than a decade.
They have cut across sectarian lines - a rare phenomenon since the devastating 1975-1990 civil war ended - and involved people from all sectors of society.
Demonstrators are angry at their leaders' failure to deal with a stagnant economy, rising prices, high unemployment, dire public services, and corruption.
Their demands include an end to government corruption and the overhaul of the political system and the formation of an independent, non-sectarian cabinet.
Source: BBC News