REUTERS: Palestinian PM Drops Resignation in Deal with Arafat

Palestinian Prime Minister Ahmed Qurie retracted his resignation on Tuesday after Yasser Arafat granted him some powers to carry out reforms, easing a paralyzing leadership crisis.

Qurie's chief of staff said he had won effective control over parts of a security apparatus whose internal corruption and lawlessness are seen by U.S.-led mediators as a big obstacle to reviving peace talks between Palestinians and Israel.

But Arafat, an ex-guerrilla leader turned president, has not honored similar reform promises made in the past under international pressure and the initial U.S. reaction to Tuesday's announcement was skeptical.

Arafat acted after an unprecedented explosion of public unrest over inaction on demands for reforms, including elections, to weed out an entrenched old elite around Arafat and make Palestinian institutions more democratic and accountable.

The strife, which has raised fear of a descent into anarchy, underlined a power struggle brewing in Gaza in anticipation of Israeli Prime Minister Ariel Sharon's plan to withdraw settlers and troops from the occupied territory by the end of next year.

"The president rejected my resignation and I will (now) comply," Qurie, who tendered his resignation 10 days ago, told reporters. "I am satisfied that President Arafat is serious this time, that it is not just words but that this time there will be action."

(And like a boomerang, Abu Merang is back in his master's hand.)