His decision casts Lebanon into renewed political uncertainty, requiring a fresh set of consultations between Lebanese President Michel Suleiman and members of parliament to designate a new premier.
"After a final round of negotiations, it became clear to me that some [parties], with their impossible demands, are in no way going to allow the proposed cabinet lineup to pass," Mr. Hariri said, apparently referring to the Free Patriotic Movement, a key member of the parliamentary opposition led by Michel Aoun.
Hariri's decision to stand down comes as little surprise, and it is possible that he will be reappointed in the coming days. Fouad Siniora, the outgoing prime minister, and Samir Geagea, one of Hariri's key allies, both said they would designate Hariri again.
"The game is completely open again," says a source close to Hariri, who spoke on condition of anonymity. "Hariri is pondering his interest in being nominated again. He will consult with his parliamentary bloc and his allies and then we will see."
Why the negotiations have stalled
The pro-West March 14 coalition, of which Hariri is a top leader, won a narrow victory at the elections in June, securing 71 seats in the 128-seat parliament. Initial negotiations saw 15 portfolios in the 30-seat cabinet going to March 14, with 10 for the opposition, led by the militant Shiite Hezbollah. President Suleiman, a neutral figure, would select the remaining five ministers. But subsequent negotiations foundered over the naming of ministers.
The negotiations are complicated by the fact that the country's major political factions often pursue the support of outside forces – chief among them Syria and Saudi Arabia – to gain the upper hand against their rivals at home.
Some analysts accuse Syria and Iran of instructing their allies in the opposition to delay the formation of a Lebanese government as a bargaining chip in future talks with the United States and the West.
Others maintain that the Saudis, Egyptians, and Americans are leaning on Hariri not to yield to the opposition's demands. Still others aver that it is, in fact, a lack of guidance from Syria, Iran, Saudi Arabia, and other foreign players that has left Lebanese politicians scrambling to second-guess what it is that their respective external sponsors actually want.
Opposition rejects Hariri's lineup
On Monday, Hariri presented his lineup for the cabinet, but it was quickly rejected by the opposition.
Mr. Aoun has insisted that the new government include Gibran Bassil, his son-in-law and current minister of telecommunications in the outgoing administration. His nephew, meanwhile – Mario Aoun, the social affairs minister – blamed Hariri's "stubbornness" for the failure of talks on forming a new government.
"If Hariri is reappointed, he will not be politically strong, since his resignation came at a time when he was in a very weak position," he told Lebanon's Al-Akhbar al-Yom news agency.
A complicating factor is that Hariri's father, Rafik – himself a former Lebanese prime minister – was killed in a 2005 truck-bomb assassination in which Syria remains the chief suspect.
No indictments have been issued by the international tribunal investigating the crime, which is due to issue a new report later this month. Damascus still retains much influence over Lebanon, leaving Hariri with the possible dilemma of having to deal with a regime whom he believes murdered his father.
Some Lebanese content without a government
Meanwhile, the absence of a new government for three months has made little difference to the lives of most Lebanese, who long ago learned to make do without the assistance of the state.
While the politicians have been squabbling over cabinet shares this summer, Lebanon experienced a tourist boom. Record numbers of visitors flocked to the cool climes of the mountains or partied at Beirut's many nightspots, giving a much-needed boost to the economy.
Jihad al-Zein, a leading columnist with the pan-Arab Al-Hayat daily, suggested in Thursday's edition that Lebanon might be better off without a government at all.
"Perhaps the reader, like me," he wrote, "believes that we do not need a government, or that the absence of a Lebanese government is less harmful than its existence."