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The Palestinian Authority cabinet resigned en masse yesterday when it became apparent that a majority of Palestinian Legislative Council members would vote no-confidence in the cabinet that PA Chairman Yasser Arafat appointed in June.

It was considered the most severe political blow to Arafat since the establishment of the PA.

Arafat and his associates tried in vain to persuade the PLC members not to vote against the cabinet, and he now has 14 days to name a new cabinet. To try to avoid a no-confidence vote, Arafat signed an executive decree declaring a general election on January 20, 2003, thereby turning the existing cabinet into a temporary one. But still the PLC representatives insisted on a confidence vote that Arafat's cabinet was certain to lose.

PLC member Mohammed Hurani - a member of Fatah, Arafat's own party, like the majority of parliament members - declared the dramatic resignation "a great victory."

The resignation announcement came after two days of stormy debate inside the PLC hall and in its corridors and back rooms. Arafat's representatives, like PLC Speaker Abu Ala (Ahmed Qureia), tried to postpone the vote with various parliamentary maneuvers, or at least, to reduce the vote of confidence to the five new cabinet ministers Arafat appointed in June. These include Interior Minister Abdel Razak Yehiyeh and Finance Minister Salam Fayad, who have been meeting with Israeli officials on a nearly routine basis. But the PLC membership rebuffed the efforts to avoid a vote of confidence in the entire cabinet.

One after one, PLC members stood up in the El Bireh hall to complain that there was no new cabinet appointed in June, and that most of the ministers have held their jobs since 1996, or were given new jobs by Arafat in June - despite a rising groundswell of public criticism against the ministers and demands for their resignation.

The cabinet, said the PLC members, has not changed, and cannot lead the people in its hour of crisis. Hurani even said that the lack of leadership and strategy is what led the Palestinians to the current situation.

Some charged the cabinet was appointed under U.S. and Israeli pressure. Those critics were critical of PA Interior Minister Yehiyeh, noting that he had told a newspaper interviewer that "throwing rocks is also a form of terrorism." He was also accused of providing foreign diplomats information about his security reform plans, before reporting to the PLC on those plans.

Most of the parliamentary maneuvering was over the question of whether the PLC would vote on the full cabinet or just on the five new ministers. At one point Arafat called in most of the Fatah PLC members to persuade them that a vote of confidence in the five new ministers would suffice.

Arafat's announcement of general elections was seen as an attempt to turn his current cabinet into a temporary one, until the January 20 election. But the PLC members insisted on the vote of confidence. To avoid it, his secretary general, Tayeb Abdel Rahim, announced the resignation of the cabinet.

Now he has 14 days to name a new cabinet - and already last night some PLC members were saying that if the new cabinet does not meet their demands for non-corrupt professionals, they will vote against it, as well.

Lawmakers clapped and shared jubilant smiles as the resignations were announced just moments before parliament appeared set to vote no-confidence in Arafat's ministers.

The parliamentary challenge move does not immediately endanger Arafat's leadership or appear to be organized by any individual challenger. However, it was a blow to his prestige and reflected a groundswell of discontent shared by ordinary Palestinians tired of years of corruption and mismanagement.

Salah Ta'amri, a member of Arafat's Fatah movement who has known the Palestinian leader for 36 years, said he had never before opposed Arafat but joined the wave of discontent "so he knows how serious we are ... There is a crisis of confidence."

Nobody called directly for Arafat to step down. The critics blamed his aides, not the leader. "I hope President Arafat ... will wake up and start to understand that the people around him are not satisfying the Palestinians' needs," said Jibril Rajoub, a PLC member recently fired by Arafat from his position as West Bank security chief. "I hope he will learn a lesson from what happened today, which represents the disappointment in which Palestinians are living for two years."

The drama yesterday was finally sparked by the parliamentary legal committee's decision that the entire cabinet must be presented for approval, not just the five new ministers. Observers said legislators apparently didn't believe Arafat was sincere in setting a date for an election and feared he might revoke the decree later. Just before the vote was to begin, cabinet ministers submitted their resignations to Arafat.

According to Hurani, 57 lawmakers were poised to vote against him, out of the 65 legislators attending either in Ramallah or by video conference from Gaza. "He (Arafat) is our leader, but we are his partners, and we will criticize him when he does things we think are not suitable," Hurani said.

The January 20 election date is not being taken seriously in Ramallah, Jerusalem or Washington. A U.S. official suggested yesterday that the elections were coming too soon. "We think the ground has to be prepared before that (elections)," said Paul Patin, spokesman at the U.S. Embassy in Tel Aviv. No leading Palestinians have announced plans to run against Arafat.

Communications Minister Reuven Rivlin, who often speaks for Prime Minister Ariel Sharon, said the Palestinians must know that if they reelect Arafat, "we will continue to treat them as a people led by a terrorist."

Defense Minister Benjamin Ben-Eliezer said the developments yesterday were signs that Arafat's influence was waning. "Until now, we had been accustomed to a reality in which without Arafat, nothing could happen," said Ben-Eliezer. "It could be that we're at the beginning of some kind of change."

Maj. Gen. Aharon Ze'evi, head of Military Intelligence, said that the PLC's moves yesterday were "a very clear message" about a decline in Arafat's stature. "The PLC members who expressed no-confidence were saying `We want real reforms. We're tired of the whitewashing.'"