The Palestinian leadership has approved the nomination of a new prime minister to replace Mahmoud Abbas, who resigned on Saturday.
Ahmed Qurei (left) is an Arafat loyalist
The nominee - proposed by President Yasser Arafat - is the parliamentary speaker, Ahmed Qurei, a leading member of the mainstream Fatah faction who helped to negotiate the Oslo peace accord with Israel 10 years ago.
Sources close to Mr Qurei - who is also known as Abu Ala - say he has agreed in principle to serve as the new prime minister. However, he has not yet given any official response.
Palestinian officials describe him as an Arafat loyalist who is unlikely to challenge the veteran leader.
However, the BBC's Richard Miron in Jerusalem says this could make him unacceptable to the Israelis, who have been stepping up their demands for Mr Arafat to be forced into exile.
And the position of Mr Abbas - also known as Abu Mazen - remains uncertain, as there is still no confirmation that Mr Arafat has formally accepted his resignation.
He resigned following a protracted power struggle with Mr Arafat for control over Palestinian security forces.
But he did not rule out another turn as prime
minister in the future.
"It's very premature to
talk about this right now," he told
reporters on Sunday when asked whether he would
accept the post again. "My resignation is
Palestinian Authority Minister for Security Affairs Mohammed Dahlan has said that he would not serve in any new cabinet unless it was headed by Mr Abbas, reports Haaretz newspaper.
Many Palestinians believed Abu Mazen was too close to Israel and too willing to meet American demands.
The leadership crisis has triggered more calls from Israeli ministers for Mr Arafat to be forced into exile. The veteran Palestinian leader remains largely confined to his battered headquarters in the West Bank town of Ramallah.
"As long as Arafat is in the region, he won't let any
other leader develop," said Israeli Foreign Minister Silvan Shalom.
Israel and the US administration refuse to deal with Mr Arafat, who they describe as "tainted by terror".
But US Secretary of State Colin Powell on Sunday cautioned against exiling him "at this time", saying such a move would only serve "to put him on the world stage, as opposed to the stage he is currently occupying".
And US national security adviser Condoleezza Rice said Mr Arafat had "hamstrung" Mr Abbas in his efforts to control the Palestinian security forces. She insisted that the Palestinian Authority must "get an empowered prime minister and let him work".
The United States has said it remains committed to the internationally backed Middle East peace plan - the roadmap - despite the resignation of Mr Abbas.
But a new cycle of violence is looming after Israel tried to kill Sheikh Ahmed Yassin, co-founder and spiritual leader of the radical Palestinian movement Hamas, on Saturday.
The Israeli military has promised a "relentless war against Hamas". That view was echoed by Israeli Prime Minister Ariel Sharon, who said the group's leaders were "marked for death" and would not be given "a moment's rest".
At least 11 Hamas militants and four civilian bystanders have been killed in Israeli missile strikes in Gaza since 21 August.
The Israeli military said it had targeted a building in Gaza City where the Hamas leadership was meeting "to plan future terror attacks against Israelis".
Hamas officials said Sheikh Yassin and his assistant, Ismail Hanieh, alerted by the sound of approaching aircraft, had left the house just moments before the air strike.