Palestinian leader Yasser Arafat came out the winner Saturday after weeks of bitter political infighting with his prime minister, keeping his grip on security forces and putting a handpicked confidant in the post of interior minister.
The agreement clears the way for the formation of a government in the coming days and the resumption of high-level talks with Israel, but frustrates American efforts to sideline Arafat.
Also Saturday, Israeli troops shot and killed two Palestinians in violent street clashes and blew up a large explosives lab hidden among buildings in a cramped West Bank refugee camp. In Gaza, soldiers killed two Palestinians in an off-limits zone near the fence with Israel.
Arafat and Prime Minister Ahmed Qureia met Saturday with top officials from the ruling Fatah movement to finalize agreement over control of eight security branches and the makeup of a new Cabinet. With the arrangement, an intense power struggle and weeks of political limbo appeared close to an end.
"I hope we will finish forming [the Cabinet] in the next couple of days," Arafat said. "We will announce it as soon as possible."
Arafat came out the clear winner, maintaining his ultimate hold on security forces by placing them under the command of a 12-member national security council that he chairs. Qureia had demanded that those forces be put under the control of an interior minister of his choosing.
Arafat, too, rejected the prime minister's pick for interior minister and placed his own longtime confidant, Hakam Bilawi, in that position.
The two leaders were to meet again yesterday to work out several final points of dispute. In a move that would further tighten his ultimate hold over security, Arafat wants Bilawi's responsibilities to include overseeing public order, meaning he would direct security forces in carrying out the orders of the national security council. Qureia is seeking to limit Bilawi's authority.
Pushing Qureia hard in the deal, Arafat appears set even to reject a last face-saving consolation for his prime minister, who sought to have his rejected pick for the interior minister, General Nasser Yousef, stay in the government as a deputy prime minister. Arafat is resisting.
The compromise is sure to upset US officials, who, along with Israel, have sought to isolate Arafat and whittle away at his authority. The previous prime minister, Mahmoud Abbas, walked off the job after just four months, also after failing to wrest security forces from Arafat's control.
Israel and the US believe Arafat has links to terror attacks and is a hindrance to progress toward peace. US officials had hoped a prime minister in control of security personnel might use them to crack down on Islamic and other militant groups that have killed hundreds of Israelis.
Palestinian leaders, including Qureia, have said they prefer a negotiated end to violence, not a crackdown on militants, which they warn could widen into a civil war.
With the political standoff nearing resolution, Qureia could announce the makeup of the Cabinet by yesterday, officials said.
"They worked out the major issues and the small details will be worked out in the coming hours," Arafat aide Nabil Abu Rdeneh said.