Turkish Prime Minister Ahmet Davutoglu said Thursday that coalition talks with the main opposition Republican People's Party (CHP) had ended in failure and early elections looked now to be the "only option."
The ruling Justice and Development Party (AKP) led by Davutoglu had negotiated for several weeks with the CHP, after losing its overall parliamentary majority in June 7 polls for the first time since it came to power in 2002.
"We have not been successful in assuring a favorable base for the creation of a government," Davutoglu told reporters after a final meeting with CHP leader Kemal Kilicdaroglu.
"There is a strong possibility of appealing to the national will," he said in reference to new snap polls following the inconclusive June elections.
"Actually the snap elections have become the only option for Turkey," he added.
Davutoglu said AKP negotiators had offered a "medium-term reform government" to the CHP but "no common ground has been found."
"Our party has done its best not to leave Turkey without a government and I'm sure that our nation has witnessed this," Davutoglu said.
"But it's obvious that AKP and CHP have deep disagreements, which is quite natural."
The political impasse comes as Ankara wages one of its biggest security operations in years - a cross-border offensive against Islamic State (ISIS) terrorists in Syria, and a far more intense offensive targeting Kurdistan Workers' Party (PKK) rebels in northern Iraq and southeast Turkey.
While an initial round of talks began warmly, opposition politicians and commentators have accused President Recep Tayyip Erdogan of meddling in the process in order to trigger early elections.
The results of the June 7 elections were one of the biggest blows yet to the combative Erdogan and torpedoed his dream of parliament agreeing a new presidential system for Turkey.
The Turkish lira plunged to a new record low against the dollar, as investors took fright at political uncertainty and the prospect of new polls.
The lira, which has faced months of pressure, fell 1.85% to trade at 2.8214 to the dollar.
AFP contributed to this report.