Fears for Palestine peace process as PM quits

The official Palestinian news agency Wafa said President Mahmoud Abbas was expected to name a new Prime Minister within days.

Mr Abbas and Mr Fayyad, 61, had been locked in an increasingly bitter dispute over the extent of the Prime Minister’s authority. Mr Abbas did not respond to Mr Fayyad’s resignation for two days.

His departure could spell trouble for Mr Abbas. Mr Fayyad, a Western-trained economist, was expected to play a key role in US efforts to revive peace talks.

As part of that effort, US Secretary of State John Kerry has said he plans to announce a series of measures to boost the West Bank economy. Mr Fayyad, a former official at the International Monetary Fund would be key to overseeing such projects.

Mr Fayyad has been Prime Minister of the Palestinian Authority, the self-rule government that administers roughly 40 per cent of the Israeli-controlled West Bank, since mid-2007.

A squeaky-clean public image and willingness to take on entrenched interests has often landed him in trouble with Mr Abbas’ long-ruling Fatah movement. The relationship between the two escalated last month over the resignation of Mr Fayyad’s Finance Minister, Nabil Kassis. Mr Fayyad accepted the resignation, but Mr Abbas then overruled the Prime Minister, effectively challenging his right to hire and fire Ministers.

Mr Fayyad has good ties with the US and is credited with cracking down on public corruption, securing foreign aid and preparing the groundwork and infrastructure for a future Palestinian state.

The White House said it appreciates the efforts of Mr Fayyad and Mr Abbas in working with the US and other nations to support the creation of an independent Palestinian state.

But Hamas spokesman Fawzi Barhoum criticised Mr Fayyad saying he and his government “worked to protect the Zionist occupation and US interests”.