Palestinian Authority premier Salam Fayyad gives up finance post

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RAMALLAH, West Bank -- Palestinian Authority Prime Minister Salam Fayyad kept the top job in a Cabinet shakeup Wednesday but relinquished his duties as finance minister, a position that earned him praise abroad and criticism at home.

The latest reorganization had been expected since last year, when Palestinian Authority President Mahmoud Abbas agreed with rival faction Hamas, which controls the Gaza Strip, to form a unity government.

The reconciliation deal quickly stalled, however, in part because Hamas leaders objected to Fayyad remaining as prime minister in the new government. After months of deadlock, Abbas recently asked Fayyad to form a new Cabinet without Hamas’ consultation.

Hamas officials criticized Abbas on Wednesday, saying he should have formed the kind of unity government previously agreed upon last year during meetings in Qatar.


Speaking in Ramallah hours before swearing in the new Cabinet, Abbas blamed Hamas for refusing to allow the Palestinian Elections Commission to begin voter registration in Gaza. Abbas promised that his new 24-minister Cabinet would resign as soon as he and Hamas settled their differences.

The U.S.-educated Fayyad became finance minister in 2003 after Western donor countries refused to continue financing the corruption-plagued Palestinian Authority without assurances that the money would be better managed.

Fayyad quickly restored Western confidence, in part by trying to address the issue of corruption. On Wednesday, Palestinian anti-corruption investigators said Mohammed Rashid, a top financial advisor of the late Yasser Arafat, was being sought on suspicion that he stole millions of dollars of public money before Arafat’s death in 2004, an accusation Rashid has denied.

However, Fayyad now faces a financial crisis triggered by a sharp drop in international donations that has created a budget deficit. His call for austerity measures and tax hikes proved unpopular among Palestinians.

His replacement as finance minister is Nabil Kassis, a former university president whose appointment was supported by Fayyad. Both men are considered politically independent.


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