Fonseka, the country's only four-star general, sidestepped questions on his retirement plans, but associates and analysts expect him to stand against Rajapakse as an opposition candidate.
"He is certainly entering politics. It is an irreversible process for him now," Sumanasiri Liyanage, a political science professor at the University of Peradeniya, told AFP.
"In the short term it is good because he is helping to mobilise the main opposition. A stronger opposition is good for democracy," Liyanage said.
Fonseka, from the majority Sinhalese ethnic group and known as a nationalist, criticised Rajapakse for failing to make peace with the Tamil minority on whose behalf the LTTE rebels launched their separatist fight.
"Your excellency’s government has yet to win the peace in spite of the fact that the army under my leadership won the