Arafat rejects cabinet and puts peace process at risk

A power struggle between the new Palestinian Prime Minister and Yasser Arafat could postpone the release of the "road-map" for peace in the region yet again.

America and Britain have said the plans, which call for a Palestinian state within three years, will be published once Mahmoud Abbas, the Palestinian premier, names his Cabinet.

But Mr Arafat reportedly objected to those chosen by Mr Abbas, and angrily threw the list on the floor. A meeting to approve the Cabinet was postponed while talks to resolve the dispute continued yesterday.

Mr Arafat, the President of the Palestinian Authority, agreed to appoint a prime minister under intense pressure from European diplomats. The United States was refusing to speak to Mr Arafat, or to push forward the peace process while he was in charge.

President George Bush promised to release the long-awaited road-map once Mr Arafat appointed Mr Abbas, also known as Abu Mazen. It did not materialise, and was then promised once Mr Abbas named his Cabinet.

Mr Arafat's timing could not be worse. Yesterday's delays came a day after Ariel Sharon, the Israeli Prime Minister, said that he was ready to make "painful concessions" to win a peace agreement.

The Palestinian President appears to be locked in a power struggle with Mr Abbas. Within the Palestinian leadership, Mr Abbas, who lacks charisma, would normally present no challenge to Mr Arafat.

He has no loyalists of his own. One Arafat supporter claimed the President could "finish Abu Mazen in two days".

But with American backing, Mr Abbas could be a different prospect. The Cabinet Mr Abbas proposed is one in which Mr Arafat's loyalists are either fired or demoted.

Out is Hani al-Hassan, Mr Arafat's Interior Minister. So, in effect, is Saeb Erekat, the Local Government Minister who has been Mr Arafat's unofficial spokesman to the foreign press. He has been offered a demotion to minister without portfolio – an indignity he said he would reject.

Two other Arafat loyalists, Yasser Abed Rabbo, the Information Minister and Maher al-Masri, the Trade Minister, have rejected demotions.

Palestinian observers say the names of those given the top jobs indicate Mr Abbas's intended policies. The main Palestinian architect of the Oslo peace accords, Mr Abbas has favoured dialogue with the Israelis since the 1970s – he now says he was behind calls for recognising Israel at that time.

He has appointed men who enjoy good relations with the Israeli authorities, such as Mohammed Dahlan, his first choice for Interior Minister, who would be responsible for trying to rein in militant groups.

Deeply unpopular on the Palestinian streets, partly because of his contacts with the Israeli authorities, Mr Dahlan was one of those, with Mr Abbas, who were against Mr Arafat's decision to reject the Camp David proposals outright, when the peace process broke down.

Israeli officials are now saying that Mr Dahlan is a man they can do business with.

Faced with Mr Arafat's fury, Mr Abbas proposed a compromise yesterday: to name himself Interior Minister and appoint Mr Dahlan deputy.

His choice of Deputy Prime Minister is also revealing, say Palestinian observers. Nabil Yussuf, a former Palestinian police chief, also enjoys good relations with the Israelis – in 1994, thousands of Palestinian demonstrated when he met a leader of a right-wing Israeli party.

He is also known for overseeing a crackdown on the militant Islamic group Hamas in the mid-1990s. His appointment is seen as a sign that Mr Abbas intends to take on Hamas.