The internationally respected prime minister of the Palestinian Authority, Salam Fayyad, has resigned, raising concerns about political stability in the West Bank days after Secretary of State John Kerry proposed a broad initiative to aid the Palestinian economy there to shore up peace efforts.
The president of the Western-backed authority, Mahmoud Abbas, accepted Mr Fayyad's resignation yesterday but asked him to stay until a new government could be formed, according to Palestinian officials, signaling an effort to minimize the upheaval.
But the timing of the resignation, which had been brewing for weeks over Mr Fayyad's differences with Mr Abbas and his Fatah party, seemed to deliver a blow to US prestige at the very least.
The possibility of heading off the prime minister's resignation was among the topics president Barack Obama discussed with Mr Fayyad and Mr Abbas when he visited Ramallah, West Bank, last month, and it was also a focus of Kerry's meeting with Mr Abbas last week.
Since Mr Kerry left the region, he has had more than one telephone conversation with both men to try to prevent the resignation. Israeli officials have also been quietly urging Mr Fayyad to stay, aware that their public support is likely to backfire.
"The US has worked very hard," one Western diplomatic official said, speaking on the condition of anonymity. "Kerry asked him to stay. There's been a lot of messaging from the Western community about how much we value Fayyad's work."
Underlying tensions between Mr Fayyad and Mr Abbas burst out in early March when finance minister Nabil Qassis announced that he was quitting.
Mr Fayyad accepted the minister's resignation against the wishes of Mr Abbas.
Palestinian insiders said Mr Fayyad, a political independent, submitted a letter to the president on March 23rd laying out his intention to resign. In the meantime Mr Fayyad helped pass a new annual budget, spent a few days in a hospital after suffering stomach pains and kept things on course during the visits of Mr Obama and Mr Kerry.
Mr Obama told an Israeli audience in Jerusalem that the Israelis had "true partners" in Mr Abbas and Mr Fayyad. The resignation was sealed in a brief meeting with Mr Abbas yesterday evening, two days after Mr Abbas returned from a trip abroad.
Mr Fayyad, a US-educated economist, had gained the confidence of the West and of many Israelis, building up the credibility of the
Palestinian Authority by introducing transparency, accountability and stability.
Since being appointed to the premiership in 2007, he has championed law and order in the West Bank after years of chaos and focused on building the institutions of a future state.
But he has struggled to build a popular constituency on his home turf and became a target for senior Fatah figures resentful of his power, and who blamed him for all the authority's problems.
People who spoke with Mr Fayyad yesterday and throughout the past week said he had grown increasingly frustrated over attacks on his leadership by Fatah officials, and over Mr Abbas' failure to either defend him publicly or move behind the scenes to quell the criticism.