Palestinian leader Yasser Arafat has rejected a list of cabinet members drawn up by Prime Minister Mahmoud Abbas, according to Palestinian sources.
Arafat and Abu Mazen are widely regarded as rivals
They say Mr Abbas - a leading moderate also known as Abu Mazen - has demoted senior supporters of Mr Arafat and taken the powerful interior ministry for himself.
An unnamed Palestinian official also told AFP new agency that the demoted officials are refusing to join the proposed cabinet.
Mr Arafat has been under international pressure to share power with Abu Mazen - who has called for reform of the Palestinian Authority and a suspension of suicide attacks against Israelis.
The senior Palestinian figures who are reportedly refusing to serve in the new cabinet include current chief negotiator Saeb Erakat, Information Minister Yasser Abed Rabbo and Economy Minister Maher al-Masri, the official told AFP.
He said Mr Erakat and Mr Abed Rabbo had been given the lesser role of minister without portfolio. Mr Masri is said to have been offered the energy portfolio.
The Central Committee of Mr Arafat's Fatah movement was due to discuss the proposal on Sunday - but meeting was cancelled because of the Palestinian leader's objections, AFP reports.
Mr Arafat is said to be particularly unhappy with the appointment of former Gaza security chief Mohammad Dahlan as minister of state for interior affairs.
Mr Dahlan, who has also criticised suicide bombings, fell out with Mr Arafat last year.
Only two members of the outgoing Palestinian Cabinet - Finance Minister Salam Fayad and Education Minister Naim Abul Hummus - remain in the same posts.
Nabil Shaath, the outgoing planning minister, is reported to have been given the external affairs portfolio.
Mr Shaath has extensive contacts with foreign leaders and has acted as de facto foreign minister.
Interim peace agreements had prevented the Palestinians from creating a formal foreign ministry.
Mr Shaath and Nasser Yousef, a former senior security official, will also serve as deputy prime ministers, AP news agency reported.