Thailand's main opposition Democrat Party has announced it will boycott an election set for February.
Prime Minister Yingluck Shinawatra called a snap election earlier this month in a bid to end weeks of mass protests.
The opposition-backed protests in Bangkok have caused Thailand's most serious political turmoil since 2010.
Democrat Party leader Abhisit Vejjajiva told a news conference it would not be fielding candidates, saying Thai politics was at a "failed stage" and the The Thai people had "lost their faith in the democratic system."
The head of the Thai army told the Bangkok Post the country's political divisions could "trigger a civil war".
General Prayuth Chan-ocha has proposed a people's assembly made up of civilians, not leaders, to heal the divisions.
He said it should be made up of people from both sides of the political divide - known as the "red shirts", those who support Thaksin Shinawatra, and the "yellow shirts", those who oppose him.
His comments came after a defence council meeting on Friday to discuss the 2 February election.
Defence spokesman Col Thanatip Sawangsaeng said the army "is ready to support the Election Commission in organising the elections when asked".
But a military source has told the BBC that privately the army believes it would be better for the election to be delayed - as sought by the opposition parties.
Ms Yingluck won the last elections in 2011, but protesters say her brother - the controversial ousted former leader Thaksin Shinawatra - remains in charge.
Her Pheu Thai party has a majority in parliament, and draws significant support from Thailand's rural areas. It is seen as well-placed to win February's election.
Protests began nearly a month ago after Thailand's lower house passed a controversial amnesty bill, which critics said could allow Thaksin Shinawatra to return without serving time in jail.
Mr Thaksin is in self-imposed exile after he was overthrown in a military army coup in 2006 and convicted of corruption.