The MQM represents the Urdu-speaking community which migrated from India during partition in 1947. It is the biggest party in Karachi, the country's largest city of over 18 million.
MQM parliamentary leader Farooq Sattar told the National Assembly before resignation that his party's decision to quit all legislative bodies was taken after long deliberations.
He said that the army chief and Karachi corps commander refused to meet him after he approached them to convey MQM's concerns over the operation.
The party has 24 members in the National Assembly, 8 senators and 51 members of the provincial assembly of Sindh of which Karachi is the capital.
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The security operation in Karachi was launched in September, 2013 to purge the violence-prone city of militants and criminals and all parties including MQM had supported it.
But differences erupted after several members of MQM were arrested for alleged involvement in different crimes. The party alleged that it was being victimised.
MQM chief Altaf Hussain, who lives in London in self-exile since 1992, also endorsed the decision saying no one in the government or army was willing to listen to his party's grievances.