Mahmoud Abbas is seen as a moderate, close to Yasser Arafat
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The deputy leader of Yasser Arafat's Palestinian Authority, Mahmoud Abbas, has agreed to become prime minister, a senior aide to Mr Arafat has said.
Nabil Abu Rudeina said Mr Abbas had accepted the post and all the constitutional procedures have been completed.
The appointment of a prime minister was a condition set by the United States to begin work on an internationally-backed plan for peace between Israel and the Palestinians.
On Tuesday, the Palestinian parliament approved the creation of the post, after Mr Abbas had been nominated by Mr Arafat.
It's the beginning of a transition - it is certainly a turning point and a qualitative shift in the political culture
Hanan Ashrawi, Palestinian legislator
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US President George W Bush hailed the parliament's move as "as a sign of progress" in long-awaited Palestinian reforms.
And UK Foreign Secretary Jack Straw welcomed the appointment of a "respected advocate of peace", hoping Mr Abbas would become an "empowered and credible Prime Minister".
The US and Israel have long been insisting that the new premier must have real authority.
Mr Abbas, 67, is regarded as a moderate and has been outspoken in opposing recent Palestinian violence against Israelis.
He is also respected by Palestinian reformers, as well as Israel and the US.
However the BBC's Richard Miron in Jerusalem says Mr Abbas lacks real support on the streets of the West Bank and Gaza Strip.
Our correspondent says the new prime minister will face a difficult time balancing the conflicting demands within the Palestinian leadership and society as well as from Israel and the US.
New government
Under the new law passed on Tuesday, Mr Abbas has three weeks to form
a government and present it to parliament.
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NEW PALESTINIAN POWER-SHARING ARRANGEMENT
Mr Arafat controls security and foreign policy - including peace talks
Mr Arafat has right to appoint and dismiss premier
Prime minister will be in charge of internal affairs and forming a government
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Mr Abbas is to take over the day-to-day running of the Palestinian Authority, while Mr Arafat retains command of the security forces and has the final say on peace talks with Israel.
Palestinian legislator Hanan Ashrawi was among the first to welcome the move.
"It's the beginning of a transition - it is certainly a turning point and a qualitative shift in the political culture," she said.
"Now we have power-sharing that is clearly spelled out."
Under pressure
Mr Arafat agreed to the creation of the prime minister's post under intense international pressure.
And on Tuesday, the Palestinian parliament rejected Mr Arafat's attempts to dilute the authority of the post, in particular by retaining for himself the power to appoint cabinet ministers.
The bill defining the role of the prime minister was approved by 69 of the 88-member parliament.
The prime minister's new powers were defined in a landmark session of parliament last week.