Ok well there's a good chance you are overreacting....you DID move in together awfully quickly. He may be making the right decision in realizing that it was too soon. I think the poor guy needs some breathing room from the sounds of things. He was married previously and obviously living with someone who didn't make him happy. Then he moves in with you and you fight all the time. What about this situation is suprising to you?
I have seen many relationships strengthen from people backing off and starting again slowly. In hindsight, there are relationships in which I wish I would've done the same thing, instead of diving in head first and then trying to FORCE the relationship to function.
This may be a good thing. And really, in the end, if you don't make it you weren't meant to. A good relationship is not forced. It grows naturally. You know the old adage, if you set the person free and they come back to you, they're yours. If they don't come back, they never were yours. Try and be positive abotu his decision instead of immediately jumping to horrible conclusions. This could be what you need to 'reset' the relationship and start it off on better footing going forward. In short, relax. Let him do what he feels is right for him right now.
Live as if you were to die tomorrow. Learn as if you were to live forever. - Mohandas Gandhi