Palestinian Prime Minister Ahmed Qurie faces a deadline today to resolve differences with President Yasser Arafat blocking confirmation of a new cabinet seen as crucial to reviving peace moves.
The two leaders failed to resolve a dispute over the incoming cabinet's security powers on Monday, but officials said efforts were still under way to work out a compromise. Mr Qurie's 30-day emergency mandate was due to expire at midnight tonight.
Palestinian officials suggested the main hitch was Mr Arafat's opposition to Mr Qurie's choice of General Nasser Yousef for the powerful post of interior minister with authority over security forces.
Mr Hassan Abu Libdeh, the director of Mr Qurie's office, said the prime minister wanted his Interior Ministry to have strong security credentials, as his first order of business will be to persuade militants to agree to a truce with Israel.
Efforts to revive a stalled "road map" peace plan, backed by a "Quartet" comprising the United States, European Union, Russia and the United Nations, depend in part on Mr Qurie forming a stable government after months of Palestinian infighting.
Mr Arafat had named Mr Qurie, a longtime loyalist, as prime minister in early October after reformist Mr Mahmoud Abbas resigned, saying the Palestinian president and Israel had obstructed him and Washington had not given him enough support.
Mr Qurie (65) set up an emergency cabinet after Israel tightened its military grip on Palestinian areas in response to a suicide bombing that killed 22 people in the city of Haifa.
By forming a permanent government, Mr Qurie would meet a key demand of the US-backed road map, which includes calls for Palestinian reforms and a crackdown on militant attacks against Israel.
The plan charts a path to ending violence in a three-year-old Palestinian uprising and establishing a Palestinian state in the West Bank and Gaza Strip by 2005.