Peace plan in turmoil as Palestinian PM resigns and Israel attacks Gaza City

The Palestinian Prime Minister, Mahmoud Abbas, plunged the already tottering Middle East peace process into fresh turmoil yesterday by handing in his resignation to Yasser Arafat after weeks of conflict with the Palestinian Authority President.

The fresh crisis swiftly intensified when hours later a bomb dropped by an Israeli Air Force warplane injured Sheikh Ahmed Yassin, the spiritual leader of Hamas, in a missile attack on a flat in Gaza City that reportedly left 14 others injured.

Hamas vowed vengeance as its spokesman Abdel Aziz Rantisi said the Israelis had attacked a "big symbol" and added: "This coward enemy will pay dearly for is crimes."

The Israeli Prime Minister, Ariel Sharon, personally approved the plan after debating throughout the day what kind of explosives to use and when to strike. Israel has killed at least 11 militants and four civilians in helicopter strikes in Gaza since 21 August, two days after a suicide attack in Jerusalem killed more than 20 people.

Mr Abbas ­ also known as Abu Mazen, and regarded by Israel and the US as the only plausible point of contact in political negotiations ­ shook members of the Palestinian Legislative Council when he dramatically pre-empted a threatened confidence vote next week and brought to a head his struggle to be given the full authority to do his job.

Israel swiftly responded by saying that it would not negotiate with Mr Arafat or anyone else chosen by him ­ the Israeli Foreign Minister, Silvan Shalom, said he was "part of the problem and not part of the solution". The Israeli Health Minister, Dan Naveh, went further, echoing earlier calls from within the Israeli Cabinet for Mr Arafat's expulsion ­ a step that the moderate Legislative Council member Hanan Ashrawi said would "really fan the flames" and be the "epitome of irresponsibility and adventurism".

In a concerted message to the international community, several senior members of the council blamed Mr Sharon, for not reinforcing Mr Abbas's position by removing checkpoints, freezing settlements, halting work on the controversial 370-mile concrete wall planned to encircle the West Bank and rescinding its policy of assassinating militants.

Saeb Erekat, the Palestinian minister appointed by Mr Abbas last Thursday to lead negotiations with the Israelis, said: "I am appealing to President Bush to make every effort to keep the road-map on the table for the sake of Israel and the Palestinians." Mr Erekat said Mr Abbas ­ whose resignation was said by some legislators last night to have been accepted by Mr Arafat ­ would remain in charge of "a caretaker government" for the next five weeks, and insisted there was not yet "a political vacuum".

Mr Abbas again made clear in his own speech to the closed session of the council that he was primarily frustrated with what he said had been Israel's failure to implement its obligations under the road-map. He may also have calculated that only an extreme step could jolt the peace process back into life, but also reportedly blamed the Arab media and the US for helping to undermine him.

The sharpest issue is a battle for control of the security services, which Israel has urged be used for a crackdown on militant factions. There is also a struggle over administration of the civil service, which came to a head in Gaza last weekend when Fatah activists loyal to Mr Arafat occupied PA offices and the man appointed by Mr Abbas to run it failed to turn up for work.

Some diplomats fear that the future of the Authority could be in doubt. Of the handful of possible alternatives to Mr Abbas, the council's speaker, Abu Ala, is thought too close to Mr Arafat to be acceptable to Israel or the US while Salam Fayad, the capable finance minister, has yet to build a popular base despite some Palestinian plaudits for tacking corruption.

The attack in Gaza City targeted Hamas leaders meeting in the home of an Islamic University academic.

Sheikh Yassin recovered from his minor injuries enough to declare in front of supporters at a local mosque: "You will pay the price for this crime." He was apparently addressing Mr Sharon.