Yasser Arafat responded Wednesday to mounting dissatisfaction of his rule in a rambling speech that included rare self-criticism and a pledge of new elections and government reform. But his address was short on specifics, and critics said similar promises in the past evaporated without action.

Arafat has run the Palestinian territories virtually unchallenged since Israel permitted his return from exile eight years ago. While his position appears solid for now, Arafat is facing greater political pressure than at any time during his rule.

The heat is coming from the United States and European countries, some Arab states, the Palestinians and also the Israeli government, who are demanding various changes: reorganizing Palestinian security forces to prevent terror attacks, rooting out chronic corruption, and restructuring the government to end the concentration of power in Arafat's hands.

In Gaza late Wednesday, a Palestinian was killed in an exchange of fire that followed a mortar attack on a Jewish settlement, Palestinians and the military said.

Arafat acknowledged he has made mistakes, but heaped most of the blame for the current crisis on Israel, dedicating large parts of his speech to parliament to listing the damage caused during Israel's six-week military offensive.

"Matters have been going in the wrong direction as a result of the Israeli government's attitude," Arafat said. "Our internal situation after the recent Israeli attacks needs a comprehensive review of all aspects of our life."

He also reiterated his opposition to attacks on Israeli civilians and said he remained committed to a negotiated peace deal.

"Palestinian and Arabic public opinion have reached a point where they agree such operations do not serve our goals," Arafat said. "On the contrary it creates the hatred within the international community which was behind the creation of Israel."

Israel responded with skepticism. A spokesman for Israeli Prime Minister Ariel Sharon, Raanan Gissin, said Arafat "talks about reform but that is because of a tactical need to respond to pressure coming from the United States."

Foreign Minister Shimon Peres said a positive element was Arafat's speaking out against incitement to violence against Israel. However, Peres said: "These words must be accompanied by an uncompromising fight against terrorism, by a consolidation of all Palestinian armed forces under a single authority."

The Bush administration welcomed Arafat's speech cautiously. White House spokesman Ari Fleischer said, "Yasser Arafat's words are positive. What's important, and the president will wait and see, is whether there will be any action."

Palestinian support for Arafat has taken a sharp turn in recent weeks. When Israeli troops moved into Palestinian towns last month, confining Arafat to his Ramallah office, many Palestinians gave him their backing, viewing the Israeli action as part of a larger attack on Palestinian aspirations for statehood.

But after Arafat's release May 2 and the subsequent withdrawal of Israeli forces from Palestinian cities in the West Bank, Arafat's standing has dropped as Palestinians take stock of a 19-month-old uprising that has not brought them closer to an independent state.

Many Palestinians are particularly upset that Arafat acceded to an Israeli demand that sent 13 militants into exile. The deal ended the standoff last week at Bethlehem's Church of the Nativity, but the issue of exile is extremely sensitive for the stateless Palestinians.

"I tell you if there was a mistake, I take full responsibility," Arafat said. "There are always mistakes in every movement." It was the first time a Palestinian leader sanctioned deportation of any of his people.

Arafat spoke in a packed hall at the Education Ministry — the neighboring legislature building was damaged during the Israeli incursion. Israeli travel restrictions prevented attendance by lawmakers from the Gaza Strip, who watched by video hookup.

Arafat's 45-minute speech, delivered as he sat in front of a larger-than-life poster of himself, received only a smattering of applause.

"Maybe expectations were too high," legislator Nabil Amr said. Amr resigned last week from the Palestinian Cabinet over what he said was Arafat's resistance to demands for reform.

In the hallway outside, Minister of Public Works Azzam Alahmad pulled out a copy of a speech Arafat delivered last year, noting it also included promises of elections and reforms.

Arafat called for "speedy preparations" to hold elections and restructure the Palestinian Authority to "fulfill the principle of a separation of powers."

The Palestinian leader did not give details on elections, but Parliament Speaker Ahmed Qureia said he expected some voting, including in unions and political factions, to be held by the end of the year. Qureia said he did not know when a new parliament would be chosen; parliamentary elections were last held in 1996.

Palestinian politicians said they were looking for several specific reforms:

— The dismissal of the current Cabinet, filled with many aging, longtime Arafat aides, and selection of a new one.

— An overhaul of the multiple, overlapping security forces. The security forces have about a dozen different branches, each with one headquarters in the West Bank and another in the Gaza Strip. The United States and Israel say they must be streamlined and organized to prevent terror attacks. Many Palestinians are critical for different reasons, saying the forces were hapless when Israeli forces stormed into Palestinian cities and towns.

— A crackdown on corruption that has siphoned off large sums of money intended for a future Palestinian state. Arafat is not seen as personally corrupt, but has been criticized for tolerating financial abuses by those who surround him.

— A strengthened judicial system. Arafat signed a law Tuesday recognizing the independence of the judiciary after ignoring the bill for 18 months. Arafat has been widely criticized for his one-man rule, in which he and his security forces ignored many decisions made by the judiciary.

Sharon told Israel's parliament Tuesday that he would engage in peace talks with the Palestinians only once reforms have been made and all attacks on Israelis have stopped.

Arafat's speech came on "Naqba Day," Arabic for "the catastrophe," a reference to the uprooting of Palestinians during the 1948 war that broke out at Israel's independence. In recent years, tens of thousands of Palestinians took to the streets for the commemorations, but Wednesday's turnout was much smaller.

"People are not interested anymore in words, demonstrations and clashes. They are looking how to get food for their children. They are looking how to stay alive," said Monir Hilo, a teacher in Gaza. "We are living the Naqba every day."