Negev and Galilee Development Minister Silvan Shalom will not be running in the June 10 presidential election.
Shalom made his decision Wednesday after he received indications that Prime Minister Binyamin Netanyahu would not support him.
"If Netanyahu doesn't support him, [Foreign Minister Avigdor] Liberman doesn't support him, and Liberman's support is critical", a source close to Shalom said.
Shalom's office said there would be no press conference to announce the decision.
Shalom told confidants that the only reason he decided not to run was that Netanyahu was not backing him. He expressed confidence that if Netanyahu would have endorsed him, he would have won the race.
Shalom had been considered a serious candidate for the presidency until allegations of sexual harassment derailed his plans in March. After the case against him was dropped earlier this month, he met with Netanyahu on multiple occasions to discuss possibly returning to the race as the prime minister's preferred candidate.
Following a two-hour meeting between Netanyahu and Shalom on Monday, which did not go as well as Shalom had hoped, Netanyahu had asked for two more days to consider his decision.
Shalom dismissed speculation that factors other than a lack of support from Netanyahu played a part in his decision.
He said he was not frightened by the potential of protests by women's groups and that he was convinced that at least half of the Yesh Atid faction would have supported him.
With Shalom out of the race, MK Reuven Rivlin remains the Likud's only candidate who is definitely in the race.
Likud MKs who have been intending to back Shalom told him that they would now endorse Rivlin.
Hatnua MK Meir Sheetrit joined Rivlin and Labor MK Binyamin Ben-Eliezer as the only three candidates to get the endorsements of ten MKs required to enter the race. The deadline to enter the race is May 27.
Sources close to former Foreign Minister David Levy said he had received overtures from Likud activists and MKs to join the crowded field. Levy is respected by Yisrael Beytenu chairman Avigdor Liberman, who made Levy’s daughter, Orly Levy-Abecasis, an MK.
But Levy’s associates declined to say whether he was interested in being president.
Tel Aviv Chief Rabbi Yisrael Meir Lau’s office denied a report that he was actively seeking the presidency. Army Radio reported that he was trying to use his close ties to Prime Minister Binyamin Netanyahu to become a candidate.
Former Knesset speaker Dalia Itzik is not expected to have trouble obtaining enough endorsements by next week.
But other outsiders were still facing difficulties, even after Yesh Atid distributed its endorsements. Nobel laureate Dan Shechtman had endorsements from only six MKs, and former Supreme Court judge Dalia Dorner had even fewer.