Salam Fayyad in Ramallah. AP
Palestinian PM Salam Fayyad speaking to the media in Ramallah, August 30, 2010. Photo by AP
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The Palestinian cabinet resigned on Monday, in an apparent attempt by President Mahmoud Abbas to demonstrate political reform in the wake of the popular uprising in Egypt.

The shake-up could bolster Abbas' among Palestinians dissatisfied with the workings of a cabinet regarded by many as dysfunctional.

The reshuffle had been demanded by Prime Minister Salam Fayyad, who has spearheaded efforts to create institutions for a Palestinian state. Fayyad will retain his post and select new ministers, officials said.

"The cabinet resigned today and the formation of a new cabinet will take place as soon as possible," Ali Jarbawi, minister of planning, told Reuters.

Financed by international donors and engaged in security coordination with Israel, the Palestinian Authority has a limited mandate in the occupied West Bank. It lost control of the Gaza Strip to Hamas Islamists in a 2007 civil war.

Abbas' credibility has been further sapped by stalled talks with Israel on a deal to establish a Palestinian state.

Hamas, which rejects permanent co-existence with Israel, said in response to the reshuffle it was motivated by Abbas' fears that Palestinians would follow the lead of Egyptians in demonstrating for political change.

"Unless Mahmoud Abbas carries out serious security and political reforms, his authority will be subject to the wrath of the Palestinian people," Hamas spokesman Sami Abu Zuhri said in the Gaza Strip.

Although several anti-Abbas protests erupted in the West Bank after the upheaval began in Egypt on Jan. 25, he has not faced large-scale demonstrations in the territory, whose economy has strengthened in recent years.

However, Abbas has faced public criticism over the functioning of the government. Of the 24 posts in the outgoing administration, only 16 were staffed. Two ministers resigned and six are marooned in Gaza.

Abbas said the new cabinet should focus on "strengthening the preparedness of the national institutions for the establishment of the state of independent Palestine", according to the official news agency WAFA.

The Palestinian Authority announced Saturday that it would call legislative and presidential elections by September. The last elections were held in 2006.

Hamas said it would not take part in the ballot, or recognize the results.