Fayyad heads reshuffled Palestinian government

By Mohammed Assadi

RAMALLAH, West Bank (Reuters) - Western-backed technocrat Salam Fayyad was sworn in as Palestinian prime minister on Tuesday at the head of a cabinet that now includes members of the long-dominant Fatah faction.

Fayyad, a former World Bank economist who has been premier in a caretaker role for the past two years, maintains effective control of security and finance, although Fatah members will replace political independents in some cabinet posts.

One analyst called it a "transitional" arrangement which is unlikely to make any major moves as long as Palestinian ranks remain deeply split. That is notably the case between the West Bank, where President Mahmoud Abbas of Fatah holds sway, and the Gaza Strip, which is run by his Hamas Islamist rivals.

Control of security forces and spending are key portfolios in the Palestinian Authority administration in Ramallah, headed by Abbas, who unlike Hamas has engaged in peace negotiations with Israel with the goal of establishing a Palestinian state.

The government Abbas appointed administers an annual budget of some $3 billion, about half of it from the European Union and other donors. Establishing firm control of law and order in the West Bank, with the help of U.S. training, is a priority in meeting international conditions for progress towards statehood.

Members of Fatah will hold nearly half of 20 cabinet seats in Fayyad's new line-up, meeting their demand for a greater say. Some had complained that austerity measures imposed by Fayyad deprived many Fatah loyalists of public salaries and pensions.

In an embarrassment to Abbas and a sign of division within his own movement, Fatah lawmakers Issa Qaraqe and Rabiha Thiab refused at the last moment to take part because, they told the president, Fayyad did not consult them on forming the cabinet.

Fatah had been excluded from the government since Abbas appointed Fayyad in June 2007, in the wake of a brief civil war in Gaza, to head a caretaker government. In March this year he tendered his resignation, but the request was turned down by Abbas who persuaded him to stay on as interim premier.

Political analyst Basem Zubeidi of Birzeit University said the reshuffle was meant "to appease sectors within Fatah" and give more clout to a government that was "paralysed, with little legitimacy and a lot of resentment and many opponents."

SEPARATE TERRITORIES

The Palestinian Authority in effect now administers only the Israeli-occupied West Bank, home to 2.5 million Palestinians. The Gaza Strip, where 1.5 million live, is blockaded by Israel. Since June 2007 it has been under the control of Hamas.

The new government goes some way to bolstering the authority of Abbas 10 days before he meets U.S. President Barack Obama.

Abbas had postponed swearing in a new team last week owing to dispute over the line-up. Hamas calls Fayyad's administration "illegal" and insists Abbas's term actually ended months ago.

The cabinet line-up was agreed one day after a fresh round of reconciliation talks between the rival Palestinian factions ended in stalemate in Cairo. The Egyptian-mediated negotiation has been going on for months without showing concrete results.

"This is a transitional government," Zubeidi said. "I do not think that it has the mandate, nor time, nor ability to put down long-term plans ... it will be transitional until the issue of dialogue is concluded in Cairo."

The message Fatah was sending to Hamas, he said, was that "things are not left to Fayyad" alone, and that Fatah "will not leave the national cause to a person like Fayyad."

The Palestinian internal rift has seriously undermined prospects for resuming stalled peace talks with Israel, which says it can only negotiate with one Palestinian leadership and will not negotiate with Hamas -- unless it drops its commitment to armed resistance and agrees to recognise the Jewish state.

Hamas won a parliamentary election in January 2006, ending a near-monopoly on power by the Palestine Liberation Organisation (PLO) and its dominant faction, Fatah. The government Hamas formed was subject to a crippling boycott by Western aid donors, leading to a unity government between Hamas and Fatah in 2007.

That lasted only a few months before the violence in Gaza resulted in a rift between the two Palestinian territories.

(Additional reporting by Ali Sawafta)

(Writing by Douglas Hamilton; editing by Alastair Macdonald)

Article Published: 19/05/2009