The resignation of Palestinian prime minister Salam Fayyad has cast uncertainty over the future of the Palestinian Authority and made efforts to renew peace talks between Israel and the Palestinians even more difficult.
President Mahmoud Abbas accepted Mr Fayyad's resignation during a meeting on Saturday night despite intense pressure from Washington and European Union donor states, which have long viewed Mr Fayyad as a trusted partner and political moderate.
Tension had been brewing between the two men for months after Mr Fayyad’s cash-strapped government introduced austerity measures which prompted a series of West Bank protests.
Mr Abbas’s Fatah movement has been pushing for years for the replacement of Mr Fayyad, an independent, urging Mr Abbas to replace him with a Fatah loyalist.
Mr Abbas rejected previous requests by Mr Fayyad to resign but relations between the two soured when Mr Fayyad accepted the resignation of the Palestinian finance minister, contrary to Mr Abbas’s wishes.
US secretary of state John Kerry expressed hope that the Palestinians would pick a new prime minister who can work with the United States and "establish confidence" so that Middle East peace can advance.
Washington pledge
He promised Washington would continue to work on the economic development of the West Bank, a key element of its push to breathe new life into the peace process. "We're totally committed to moving forward with the economic thing no matter what.
“We will continue to work at this and hope that president Abbas finds the right person to work with. Everybody is going to want somebody who provides confidence.”
However, there is no doubt that Mr Fayyad’s resignation is a significant blow to US peace efforts. President Barack Obama went out of his way to label both Mr Abbas and Mr Fayyad as “peace partners” during his visit last month, and Mr Kerry phoned Mr Abbas urging him to keep Mr Fayyad in his post.
Jerusalem sources expressed regret at Mr Fayyad’s resignation, saying western aid donors would be very upset to see him leave.
“He was a moderate who understood the importance of security co-operation with Israel. While his departure may not have direct bearing on the diplomatic process, it may frustrate the Americans who trusted him and saw him as a responsible party,” the sources said.
