We present a modified Lanczos algorithm to diagonalize lattice Hamiltonians
with dramatically reduced memory requirements, {\em without restricting to
variational ansatzes}. The lattice of size N is partitioned into two
subclusters. At each iteration the Lanczos vector is projected into two sets of
nsvd smaller subcluster vectors using singular value decomposition.
For low entanglement entropy See, (satisfied by short range Hamiltonians),
the truncation error is expected to vanish as exp(−nsvd1/See). Convergence is tested for the Heisenberg model on Kagom\'e
clusters of 24, 30 and 36 sites, with no lattice symmetries exploited, using
less than 15GB of dynamical memory. Generalization of the Lanczos-SVD algorithm
to multiple partitioning is discussed, and comparisons to other techniques are
given.Comment: 7 pages, 8 figure