Thailand's prime minister announced Monday that he is dissolving the lower house of Parliament to hold early elections July 3, setting off a political battle that could inflame tensions in the divided nation.

Prime Minister Abhisit Vejjajiva spoke on nationwide TV Monday night after King Bhumibol Adulyadej approved the dissolution decree.

The dissolution, effective Tuesday, opens a new front in the war between supporters of Abhisit and those of populist former leader Thaksin Shinawatra, who was ousted in a 2006 military coup.

Thaksin's removal ushered in a period of instability for Thailand, with both sides taking to the streets to support their cause. Thaksin's "Yellow Shirt" opponents in 2008 occupied the prime minister's offices for three months and Bangkok's two airports for a week.

Last year, Thaksin's supporters, the "Red Shirts," held two months of anti-government demonstrations in the capital that deteriorated into violence, leaving 91 people dead and 1,400 wounded. They demanded that Abhisit call early elections.

"This is a beginning for the nation in solving various problems of the people in an effective way through the democratic process," Abhisit said Monday. "It will be a decision of the people on how they want our country to move forward."

Abhisit recorded his speech at his desk with Buddha images and a photo of the king behind him. The setting emphasized his identity with the bedrock elements of Thai tradition: Buddhism and the monarchy.

Thaksin — now in self-imposed exile overseas — was ousted after being accused of corruption and disrespect for the king. His return to any position of influence is opposed by members of the army and others in positions of power. Critics of the military fear it might stage a pre-emptive coup.

Some of Thaksin's opponents are promoting a "no-vote" campaign which could disrupt the formation of a new Parliament.

The polls will elect 500 members of the lower house, an increase of 20 from the outgoing chamber.

Abhisit's ruling Democrat Party held 172 seats in the outgoing lower house, while the main opposition Puea Thai party associated with Thaksin had 186.

Puea Thai won the most seats in the last elections in 2007 and formed a government that ruled for about a year. But controversial court rulings and militant anti-Thaksin demonstrations helped Abhisit's Democrats woo enough lawmakers to form a new ruling coalition and take power.

Polls suggest that Puea Thai will win the most seats, but probably not a majority. If so, the balance of power will lie with smaller parties whose allegiances are often won by the number of Cabinet seats they are offered in a coalition government.

The dissolution was announced after a court ruled earlier Monday that three recently passed electoral laws needed for holding the polls are constitutional. If Parliament had been dissolved without the ruling, the elections could have been open to legal challenges.