Fayyad heads reshuffled Palestinian govt

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 president's 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 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, the Fatah leader, holds sway, and the Gaza Strip, which is run by his Hamas Islamist rivals.

"The programme of this government will be in harmony with the programme approved by the previous government, trying to benefit from the expansion of the government in order to improve its capabilities to serve," Fayyad told reporters.

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 (1 billion pounds), 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.

EMBARRASSMENT

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 In March this year Fayyad tendered his resignation, a move some saw as a mark of frustration with challenges from Fatah. But Abbas 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."

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.

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.

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 hit by a crippling boycott and the unity team it later formed with Fatah lasted only a few months before the violence in Gaza split the two Palestinian territories.

(Additional reporting by Ali Sawafta)

(Writing by Douglas Hamilton; editing by Alastair Macdonald)

Article Published: 19/05/2009