New Palestinian PM admits hurdles

Prime Minister Salam Fayyad is seen as a reformer

The new Palestinian prime minister says his government faces a "credibility problem" but is nonetheless the only legitimate administration.

Salam Fayyad told the BBC restoring security would be his first priority.

His cabinet replaces one dominated by Islamist party, Hamas, that was sacked as it seized violent control of Gaza, expelling its Fatah rivals.

Hamas has called the new cabinet illegal but Israel has welcomed it as a possible partner in peace negotiations.

Speaking on a trip to New York, Israeli Prime Minister Ehud Olmert expressed confidence in the new Palestinian government and hinted that Israel could release tax money to it and ease travel restrictions to the West Bank.

Israel has withheld around $700m in tax revenues it has collected over the past year for the Palestinian Authority because it operates an economic embargo on Hamas.

'Mind shift'

The US and EU - major donors of aid to the Palestinians - had also sidelined the preceding Hamas-led administration over its refusal to renounce violence and recognise Israel.

Mr Fayyad's cabinet was sworn in on Sunday by the Palestinian Authority president and Fatah leader, Mahmoud Abbas.

SALAM FAYYAD Born in 1952 near West Bank city of Tulkarm Holds a PhD in economics from the University of Texas Worked at the World Bank in Washington from 1987-1995 IMF representative to Palestine until 2001 Finance minister under the Fatah-controlled administration from 2002-2005 Credited with cracking down on official corruption Profile: Salam Fayyad Fayyad's cabinet

No Hamas members were included in the cabinet and only one member of the new cabinet, Interior Minister Abdel Razak Yehiyeh, is from the Fatah party - many of the rest are independents.

Mr Fayyad told the BBC his emergency cabinet's problems stemmed from past failures to curb lawlessness.

"I think we do have a serious credibility problem and that... emanates from the fact that there is total breakdown here... particularly in the security sphere."

He said his government's main priority was restoring law and order.

Mr Fayyad said peace talks would only work if everyone understood "there's one legitimate Palestinian national authority".

"Unless that's understood fully, and that may require some kind of mind shift... I'm afraid we can go from one round of dialogue to another round of dialogue endlessly.

"I'm not interested in that," he said.

'Dishonourable events'

The new government took the oath of office in the presidential compound in the West Bank city of Ramallah.

Q&A: Gaza chaos How Hamas took over

Mr Fayyad, who served as finance minister in the previous administration, pledged to protect the interests of the Palestinian people.

He added that his cabinet would work to "put an end to the anomaly of the dishonourable events", referring to Hamas taking control of Gaza.

A decree signed by Mr Abbas allowed him to swear in the new cabinet and gave it the power to make decisions without the approval of parliament, in which Hamas has a majority.

A second decree outlawed a Hamas paramilitary force, the Executive Force, and other "militias" linked to the group.

But the BBC's Bethany Bell in Jerusalem says that Mr Abbas may not have the power to enforce the ban on Hamas's armed forces.

Gaza 'isolated'

Hamas has dismissed the new government as illegal.

HAVE YOUR SAY Fatah seems to be corrupt but I doubt Hamas is any better, especially with their religious agenda Sassan, Munich Send us your comments

The Hamas leader and former prime minister, Ismail Haniya, was sacked by Mr Abbas on Thursday after factional fighting left more than 100 people dead in Gaza.

Shortly afterwards, the Hamas movement said it had taken over full control of the territory, as its gunmen ransacked Fatah offices and arrested or killed its fighters.

Israeli officials have called for steps to isolate Gaza, which they say will be considered a "terrorist entity".

Israeli Deputy Defence Minister Ephraim Sneh was quoted by Israeli radio as saying that Israeli troops had been positioned in northern Gaza near the border.

Israel fuel company Dor Alon cut off all fuel supplies to the Gaza Strip except those to the electricity generating plant, in a move which it said had been co-ordinated with the Israeli military.