The new Palestinian Cabinet, stacked with ministers hand-picked by Yasser Arafat, is set to win approval by parliament this week but may have trouble renewing talks with Israel, lawmakers said Monday.

The new lineup leaves Arafat in control of Palestinian security forces, despite Israeli and U.S. demands that he step aside. Israel expressed dismay, but stopped short of saying it would not deal with Palestinian Prime Minister Ahmed Qureia (search).

Also Monday, the Israeli daily Haaretz said the Defense Ministry wants to extend a planned security barrier six miles east of Jerusalem, reaching far deeper into the West Bank than in published ministry plans. Ministry officials said the published route, which runs closer to Jerusalem, reflects official thinking.

Israel says it is building the barrier through the West Bank and around Jerusalem to keep out Palestinian militants. Palestinians fear an Israeli land grab. The barrier has emerged as a major point of contention between the United States and Israel, with U.S. officials demanding it not cut into the West Bank.

In another development, Arafat's national security adviser, Jibril Rajoub (search), attacked the Bush administration, saying it is controlled by Zionist groups and biased in favor of Israel. "The word `Arab' causes them (U.S. officials) nausea and revulsion," Rajoub said in a recent interview with the London-based daily Al Haqaeq.

While privately complaining of U.S. bias, Palestinian Authority officials are usually careful not to go too far in their public criticism of the United States, the key Mideast mediator. Rajoub has had close ties to U.S. officials in the past.

Qureia, the Palestinian prime minister, announced the formation of his Cabinet on Sunday and said it would be presented to parliament for approval Wednesday.

In order to move ahead, the prime minister had to back down in a weeks-long dispute with Arafat over control of the security forces. Qureia's defeat left him weakened and threatened to complicate efforts to begin implementing the U.S.-backed "road map" peace plan.

Israel and the United States expressed disappointment. They had pushed for the eight Palestinian security forces to be consolidated under the prime minister, in preparation for a crackdown on Palestinian militant groups.

Both charge that Arafat is tainted with terrorism and would not lead a drive against the violent groups. However, Qureia, too, has said he prefers negotiation to confrontation.

Despite their misgivings, Israeli officials — who face public pressure to resume some sort of peace talks — stopped short of saying they would boycott Qureia because Arafat remains in control.

"This is a sad day for reform, because we see that the control of the security services remains in the hands of Arafat's cartel of terror," said Raanan Gissin, an adviser to Israeli Prime Minister Ariel Sharon.

The United States was also critical. "The prime minister must have control of all of the security forces and insist that terrorists and military organizations not under the control of the Palestinian Authority be disarmed and dismantled," State Department spokeswoman Amanda Batt said.

Saeb Erekat (search), a returning Cabinet minister, said Israel should stay out of Palestinian internal affairs. "The focus should be on reviving the peace process and ... implementing the road map," he said.

Hassan Khreishe, an independent legislator, said he expected the new Cabinet to win easy approval in parliament, which is controlled by Arafat's Fatah movement.

Khreishe, a frequent critic of Arafat, said the new government brings back ministers tainted by corruption, and he predicted Israel and the United States would shun the Cabinet.

"This is Yasser Arafat's government," Khreishe said. "He chose it just to send a message to the world that Yasser Arafat is the decision maker here."

Jamal Shati, a legislator from Arafat's Fatah movement, said he would vote against the government, because Qureia, also know as Abu Ala, did not clean house as promised.

"Abu Ala said he would consolidate national unity and bring in new blood and he didn't," he said.

Palestinian politics have been in disarray since the first Palestinian prime minister, Mahmoud Abbas, resigned Sept. 6 after failing to wrest the security forces from Arafat's control. Qureia was appointed his successor, but wrangling over the same issue had prevented him from forming a permanent government.

The new Cabinet has 24 ministers. In the new lineup, Finance Minister Salam Fayad and Foreign Minister Nabil Shaath keep their jobs.

The political fight with Arafat centered on Qureia's efforts to consolidate the various security forces under a single interior minister, Gen. Nasser Yousef. After weeks of bitter arguing, Arafat succeeded in putting a hand-picked confidant, Hakam Balawi, into the post.