Palestinian leaders agree cabinet

Mr Dahlan was backed by Mr Abbas, the US and Israel, but not Mr Arafat

Yasser Arafat and his prime minister, Mahmoud Abbas, have ended a dispute over who will take key security roles in a new Palestinian cabinet.

The agreement - reached hours before a midnight deadline - puts Mr Abbas as interior minister as well as prime minister while Mohammed Dahlan will report to him as minister of state for security.

Mr Arafat and Mr Abbas had argued bitterly over the role of Mr Dahlan, leading some observers to talk of fears that Mr Abbas would leave his post and plunge the peace process into a new crisis.

Intense international pressure had been put on the two men to reach a deal to allow Mr Abbas to be prime minister, which the US is demanding before it releases its Middle East peace roadmap.

The US welcomed the agreement and said it looked forward to working with Mr Abbas.

Arafat questions

Mr Arafat and Mr Abbas - often called Abu Mazen - had not met for several days, but came together to seal the deal with a handshake.

Mr Arafat announced the cabinet had been formed though it will now need to be approved by the Palestinian legislature.

If Yasser Arafat does not allow Mr Abu Mazen to form the cabinet... an opportunity of enormous importance will be lost and Arafat will have done it again

US Secretary of State
Colin Powell

The US state department on Wednesday called on the legislative council to confirm the cabinet nominations speedily.

The BBC's Barbara Plett in Ramallah says it is not yet clear why Mr Arafat backed down over Mr Abbas' ministerial choices which he saw as a challenge to his leadership.

But she says he had come under tremendous pressure from the international community over the past few days to accept the cabinet.

Mr Dahlan was Mr Abbas' choice for internal affairs minister. He is in favour of reform and was the Palestinian security chief in the Gaza Strip before falling out with Mr Arafat, the overall leader of the Palestinians.

Our correspondent says his appointment was also backed by the US and Israel, perhaps one of the reasons for opposition by Mr Arafat who may have feared he would be sidelined.

Among the international figures sent to put pressure on Mr Arafat and Mr Abbas was Omar Suleiman, the head of Egyptian intelligence, who was a key figure in talks between Palestinian factions in Cairo earlier this year.

Last-ditch appeals were made to the Palestinian leader

Numerous foreign leaders - including Egyptian President Hosni Mubarak and UK Prime Minister Tony Blair - called Mr Arafat urging a resolution to the dispute.

"If Yasser Arafat does not allow Mr Abu Mazen to form the cabinet... an opportunity of enormous importance will be lost and Arafat will have done it again," US Secretary of State Colin Powell said on Tuesday.

"The ones who will suffer the most [are] the Palestinian people as well as the innocent lives that might be lost as this crisis continues," he said.

The appointment last month of Mr Abbas as prime minister was seen as a breakthrough in reforms aimed at curbing Mr Arafat's decades-long grip on the Palestinian leadership.

The formation of a new Palestinian Government is a US pre-condition for publishing details of the new peace plan backed by the international community which aims to end two and a half years of fighting between Israel and the Palestinians.