Livni, who served as Israel's foreign minister and chief peace negotiator from 2006 to 2009, bitterly attacked Prime Minister Benjamin Netanyahu as she announced the formation of her new party, called "The Movement."
"I came to fight for peace ... and I won't allow anyone to turn peace into a bad word," she said.
Her announcement brought a new, high-profile voice to the campaign to oust Netanyahu's hardline government. But with his Likud Party leading in opinion polls and the dovish opposition divided between several parties, her candidacy did not immediately appear to pose a threat to the prime minister.
During Netanyahu's four years in power, peace talks with the Western-backed Palestinian government of President Mahmoud Abbas have remained frozen.
Frustrated with the impasse, Abbas is now heading to the United Nations this week to seek upgraded observer status for his people. Israel opposes the bid, saying Palestinian independence can only come through negotiations.
At the same time, Israel has now entered indirect, Egypt-mediated negotiations with Abbas' rival, the Islamic militant Hamas movement, as part of a cease-fire deal that ended an eight-day Israeli military offensive in Hamas' Gaza stronghold last week.
"Everything is upside down: a government that negotiates with terrorists and freezes all dialogue with those who work to prevent attacks, the opposite message that is needed in the tough neighborhood we live in," Livni said.
Livni was internationally respected during her term as foreign minister, forging a strong relationship with her American counterpart, Condoleezza Rice, as well as the Palestinians. She has been identified by both Time and Newsweek magazines as one of the world's most influential women.
But she has stumbled as a politician. Livni assumed leadership of the centrist Kadima Party in 2009 elections after then-Prime Minister Ehud Olmert was forced to resign because of a corruption scandal.
While Kadima won the most parliamentary seats in that election, Livni was unable to form a majority coalition and confined to the opposition. Kadima has steadily lost support, and early this year she was ousted as party leader. Recent polls have forecast that Kadima may not win even a single seat in parliament in the Jan. 22 vote.
Livni said she had not decided who would join her on her party list. One key question is whether Olmert, who was recently cleared of serious corruption charges, will join her.
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She said she hoped Olmert would return to politics. But with Olmert still on the sidelines, she said she decided to enter the race "because the field remained empty." Olmert's office said only that he has not decided whether to enter the race or support Livni.
Livni, 54, joins a field that includes the centrist Labor Party, led by former journalist Shelly Yachimovich, and the centrist "Yesh Atid," led by former anchorman Yair Lapid. While largely similar in ideology, these rival parties have focused their agendas largely on domestic economic issues.
"I decided to give an answer to people who don't have anyone to vote for," Livni said. "This party will return this hope that was lost."
Livni's announced Tuesday was the latest move to shake the Israeli election campaign. On Monday, Defense Minister Ehud Barak announced his retirement from politics with his tiny Independence Faction struggling in the polls.
Also Monday, the Likud elected its slate of candidates for the new election. The list was dominated by hardline lawmakers opposed to peace efforts with the Palestinians, while Likud voters ousted a number of high-profile party moderates.
The combination of Barak's departure, and the hard-line character of Likud, could push some undecided voters back to the centrist opposition.
A new survey published Tuesday -- and based on a presumption that Livni would announce a new party
-- predicted that her new party would garner nine seats in the 120-seat parliament, while Labor would win 20 and Lapid's party would get only five. That would leave the centrist bloc far short of the 61 seats needed to form a majority coalition.
In contrast, Netanyahu's Likud would win 37 seats, making it by the largest single party in parliament, with hard-line nationalist and religious parties giving it a majority.
The poll by the Maagar Mochot agency surveyed 504 people and had a margin of error of 4.5 percent.
Press; By JOSEF FEDERMAN]
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