Updated

The Palestinian parliament approved the appointment of a prime minister Monday but vested the new position with only limited powers, making the reform fall short of U.S. and Israeli hopes of sidelining Palestinian leader Yasser Arafat.

Still, the move did amount to the first formal curbing of Arafat's sweeping powers, and the planned appointment of Mahmoud Abbas -- a moderate who has spoken out against armed conflict with Israel -- seemed to offer hope of at least easing the deadly violence of the past 29 months.

"Enough of putting our destiny in the hands ... of one person," said Jibril Rajoub, who was fired by Arafat as West Bank security chief last year. Abbas' expected appointment, said Rajoub, meant "it's time to end the patriarchal regime which we were suffering from."

Many Palestinians were skeptical that the longtime leader would truly cede significant powers. Reaction from U.S. and Israeli quarters was cautious.

In Washington, the Bush administration pledged Monday to stick with its plan for a Palestinian state by 2005, despite fears of war with Iraq.

But a senior U.S. official speaking on condition of anonymity, said that before moving ahead the administration wanted to be sure a newly appointed Palestinian prime minister would have authority over security and peacemaking.

Meanwhile, violence continued. One Israeli was killed and three others wounded in an exchange of fire late Monday with Palestinian gunmen in the volatile West Bank city of Hebron, the Israeli rescue service and Israel Radio said. On Friday, Palestinians shot and killed a couple in a Jewish settlement next to Hebron.

Also late Monday, about 20 tanks entered the village of Karara in the Gaza Strip, residents said. The Israeli military would say only that an operation was in progress. Israeli incursions in Gaza occur almost nightly.

Voting 73-1, legislators meeting in Ramallah overwhelmingly approved a bill defining the prime minister's powers as dealing largely with internal affairs, including naming and supervising Cabinet ministers. Arafat, who last month agreed to appoint a premier under intense international pressure, has the right to appoint and dismiss the premier and retains control over security and peace talks.

If Arafat now approves the bill it becomes law -- otherwise it returns to parliament for another vote. Then Arafat is to formally name Abbas, who will form a Cabinet. The new premier and government are expected to be brought before parliament for approval in the coming days, Palestinian officials said.

The emerging power-sharing arrangement left room for speculation about the precise role Abbas -- a veteran politician who has had a volatile relationship with Arafat -- would carve out for himself.

Israeli Foreign Minister Silvan Shalom said Abbas should be given a chance to stop terror and incitement against Israel. "The real question is if he will get the authority," Shalom said.

But Palestinian legislator Ziad Abu Zayyad said it was up to Israel to empower Abbas by easing its debilitating travel restrictions on Palestinians and "returning life to normal."

"Israel will have to do its part in the field and help the Palestinian prime minister reach a cease-fire," he said.

Israel imposed roadblocks, curfews and other restrictions in the West Bank after violence erupted, arguing the measures were necessary to keep Palestinian attackers out of the country.

U.S. Ambassador to Israel Daniel Kurtzer said the United States believed "the prime minister should be empowered ... to move forward toward peace and away from violence and terrorism."

In Washington, State Department spokesman Richard Boucher said: "We are looking for a responsible and empowered Palestinian prime minister that we could work with and we've been looking for both the parties to be able to take actions in the right direction."

Talks on a final peace settlement broke down two years ago. Since violence erupted in September 2000, 2,193 people have been killed on the Palestinian side and 747 on the Israeli side.

Prime Minister Ariel Sharon, first elected in February 2001, has boycotted Arafat and -- faced with unrelenting attacks by Palestinian militants -- sent Israel's army to reoccupy most West Bank towns.

After Monday's decision, Arafat spokesman Nabil Abu Rdeneh read a statement calling on the United States and world community "to work immediately to force Israel to withdraw from the Palestinian territories and to start implementing the road map" -- a U.S.-backed plan envisioning Palestinian statehood by 2005.

But like Israel, President Bush has called on Palestinians to choose new leaders and banned government officials from meeting Arafat, charging that he has not taken steps to stop Palestinian violence.

Arafat's critics expect him to resist giving up power. "I don't think it will be easy for this prime minister to extract power from President Arafat," legislator Ziad Abu Amr said Monday.

A majority of the 88 members of parliament are from Arafat's Fatah movement, which has pushed for reform and urged Arafat to share power.

Seventy-four of the lawmakers participated in the session at Arafat's compound in Ramallah. Ten took part via video conference from Gaza City; Israel has barred them from traveling to the West Bank, claiming they have been involved in violent activities.