All ministers from the party Jewish Power (Otzma Yehudit) have requested to resign.
The party's outspoken leader Itamar Ben-Gvir, who is the minister responsible for national security, has held discussions with Prime Minister Benjamin Netanyahu during the week, parallel to the international mediation on a ceasefire. Ben-Gvir announced already on Saturday evening that he would leave the government.
The agreement with Hamas constitutes an Israeli "capitulation", it says in a statement from the party on Sunday.
The government's more radical flank claims to have demanded guarantees that the warfare will eventually be resumed. Finance Minister Bezalel Smotrich's ultra-religious fringe party has opposed the ceasefire and threatened to jump off, but it has been unclear whether the parties were willing to do so together and thereby pull the rug completely under the government.
After the resignation, Benjamin Netanyahu's government is leaning towards a narrow majority in the Knesset, with 62 out of 120 seats.