Yasser Arafat has nominated a close ally to replace former Prime Minister Mahmoud Abbas, who resigned at the weekend after a protracted power struggle.
Ahmed Qurei (left) is an Arafat loyalist
The nominee 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.
But Mr Qurei - who is also known as Abu Ala - has reportedly said he will only accept the post if the United States and European Union guarantee that they will support the peace process.
"I want to see the Americans, what kind of guarantee they will (give)", he told reporters in English at his office, the Reuters news agency reported.
"I want to see Europe, what kind of guarantees and support they will (give)," he said. "I'm not ready for failure. I want to see whether peace is possible or not."
The EU has indicated it will back Mr Qurei.
"He is a man who believes in peace with Israel and he has
done a lot for that. Therefore, he will get all support from the
European Union," Christina Gallach EU spokeswoman said.
Mr Qurei has reportedly demanded that Israel stop what he called "assassinations" of Palestinian militants.
Israel refers to its strikes as targeted killings - and struck at one of its highest-profile targets ever, the spiritual leader of Hamas, at the weekend.
The target, Sheikh Ahmed Yassin, escaped with slight injuries.
Mr Qurei has not responded officially to the offer to become prime minister, although he is reported to be willing in principle to accept the post. He is due to meet Mr Arafat later on Monday.
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 Mr Qurei's closeness to the Palestinian leader 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.
Mr Abbas resigned after 100 days in office
He resigned following a protracted power struggle with Mr Arafat for control over Palestinian security forces.
Many Palestinians believed Abu Mazen was too close to Israel and too willing to meet American demands.
The US and Israel had hoped to be able to sideline Mr Arafat and deal exclusively with Mr Abbas, but the long-time Palestinian leader refused to be pushed aside.
He retained control of some of the many Palestinian armed forces and appointed his own national security adviser - in competition to Mr Abbas's handpicked security chief, Mohammed Dahlan.
Mr Abbas resigned soon after, following a dramatic "back-me-or-sack-me" appeal to the Palestinian legislature to mark his first 100 days in office.
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.