Madrid, Spain (CNN) -- Embattled Spanish Prime Minister Jose Luis Rodriguez Zapatero, squeezed by the nation's prolonged economic crisis, announced Saturday he would not seek a third term in general elections due no later than March 2012.
The announcement caught some by surprise because in recent days Zapatero aides had indicated there would no imminent decision about his political future.
"This is the decision I transmit to you and make public: I will not be a candidate in the next general elections," Zapatero told leaders of his Socialist Party in Madrid, with television cameras rolling.
Spain's unemployment rate of just over 20 percent is among the highest in the European Union and Zapatero's Socialists for months have trailed in opinion polls behind the main opposition conservative Popular Party.
Local elections in all Spanish cities and for 13 of its 17 regional parliaments will be held May 22. That is widely seen as a bellwether of voter sentiment for the general elections to follow.
Opposition leaders have called for Zapatero to step down due to the nation's economic crisis, and even some in his own Socialist party have expressed doubts about his leadership.
Zapatero was first elected in 2004 and re-elected in 2008. His announcement Saturday comes exactly six months after his latest cabinet shuffle. The man named then as deputy prime minister, Alfredo Perez Rubalcaba, is now widely seen by Spanish analysts as a potential successor.
A Socialist leader seen as giving Rubalcaba a fight in the expected party primaries is defense minister Carme Chacon.
On Saturday, Zapatero told his party that when he was elected in 2004 --- just three days after a terrorist attack on Madrid commuter trains killed 191 people --- he thought two terms would be enough.
But he had not brought that up publicly in recent months as questions about his succession swirled.
On Saturday he conceded to party leaders, "We have made mistakes."
He added that "recent months have been very difficult for the work of the government" because even after enacting a budget austerity plan to reduce the public deficit that has put Spain under pressure from international financial markets, the destruction of jobs continued.
There are 4.6 million Spaniards unemployed, and 1.3 million Spanish homes have everyone out of work, according to government figures for the fourth quarter of 2010, released last January.