"Arafat and Abu Mazen have sorted out their differences," said Tayeb Abdul Rahim, a senior aide to Arafat, after last minute mediation by Omar Suleiman, the head of Egypt's intelligence, finally broke a five-week impasse before a self-imposed midnight deadline. Under the deal, Premier-designate Mahmoud Abbas, also known as Abu Mazen, will also serve as Interior Minister, while Mohammed Dahlan, the powerful ex-Gaza security chief, will be in charge of internal security.
Arafat had rejected any role for Dahlan, whom he sacked last year, but yielded to pressure from the "Quartet" led by the United States which deemed Dahlan a key to curbing militants opposed to peace with Israel.
The US welcomed the pact. It had previously said that it would not unveil a "roadmap" peace plan until Palestinians installed a government committed to democratic reforms, purged corruption and ended attacks by militants. Washington and the European Union view Abbas, a former peace negotiator and perceived moderate, as critical to achieving the reforms they hope will encourage Israel to withdraw its forces from Palestinian cities and curb Jewish settlement construction. The "roadmap" prescribes a series of such steps leading by 2005 to a Palestinian state in the West Bank and Gaza Strip, territories Israel occupied in the 1967 Middle East war.
The Palestinian parliament will meet soon to ratify the new Cabinet of up to 24 ministers, said Nabil Shaath, a minister in Arafat's outgoing Cabinet who said he would be Foreign Minister in the new one.
Abbas shook hands with Arafat in the president's office to seal the pact. A grinning Arafat emerged arm-in-arm with Abbas and the Egyptian mediator, but nobody spoke to reporters. Shaath, asked at a news conference about the emergent division of powers between Arafat and Abbas, said: "The prime minister is empowered by law and has an empowered Cabinet. We now have a mixture of presidential and parliamentary systems." Dahlan, answering to Abbas, would run policing and internal security, while Arafat would retain ultimate authority over intelligence and "general" i.e. national security. "This is a win-win game. Nobody won, nobody lost. This agreement will pave the way for the new cabinet to start its hard work and come back to the peace process," said Shaath. Analysts said that Arafat viewed Dahlan's relative independence as a threat. But Abbas insisted on Dahlan to handle security as he had shown courage in cracking down on Islamists before and after the uprising erupted.
Arafat has wielded unchallenged power in Palestinian politics since the 1960s and it was unclear how much leeway Abbas would have to reform murky security services and financial practices.
Mahmoud Zahar, a senior Islamist leader of Hamas, denounced the deal as "submission to dictate by outsiders". Another senior Hamas official, Abdel Aziz Al Rantissi, said fighters would not be cowed and "resistance is the will of the people and anyone trying to challenge it will fail."
Israeli officials, doubting Abbas's ability to buck Arafat, said they would have no comment until the new Cabinet is sworn in. Israel and the United States have demanded Palestinians sideline Arafat, whom they blame for much of the violence in the intifada before peace talks can resume. Arafat has denied the accusations.
Suleiman, the Egyptian intelligence chief, shuttled between Arafat and Abbas to try to bridge differences at the request of the "Quartet|", EU sources said. Egypt, traditionally close to Palestinians, has often mediated in their internal disputes. Suleiman's intervention followed futile exhortations by the United States, European Union and Russia to Palestinian leaders to settle their dispute in order to set the "roadmap" in motion.
"The United States looks forward to working with Abu Mazen and with the Israelis as they begin the hard work of ending the violence and returning to a political process that can achieve (US President George W. Bush's) vision of two states, Israel and Palestine, living side by side in peace and security," State Department spokesman Richard Boucher said in Washington. European Commission President Romano Prodi called the agreement "a major step forward for the Palestinian Authority as it pursues the reforms necessary to build an administration that will provide the foundations of a viable Palestinian state."
At least 2,005 Palestinians and 733 Israelis have been killed since the intifada began in September 2000.
