The Bush administration considers new Palestinian leadership critical to Mideast peace but is keeping its distance from the chaotic struggle in Gaza (search). "We will just have to watch it unfold," Secretary of State Colin Powell said Tuesday.

While renewing the administration's call for reform and faulting Yasser Arafat (search) for not giving real power to two successive prime ministers, Powell still said, "It is up to the Palestinian people and Palestinian leaders to see how they want to move forward."

Describing the situation in Gaza as chaotic, Powell told reporters at the State Department, "All we can do is to follow it and see how the Palestinians resolve this problem."

On Capitol Hill, Sen. Joseph R. Biden Jr., D-Del., agreed with the administration's assessment of Arafat. "The main obstacle to peace is the absence of responsible Palestinian leadership."

But Biden, at a Foreign Relations Committee hearing, said the administration's interest level in promoting an accord between the Palestinians and Israel appeared to wane after President Bush went to the region last year.

Specifically, Biden said the administration had failed to "more actively" support Mahmoud Abbas (search), known also as Abu Mazen, when he was prime minister. "Clearly, he was prepared to challenge Arafat, but at the end of the day he was discredited by his inability to deliver," Biden said.

And now, the committee's senior Democrat noted, a second prime minister, Ahmed Qureia, known also as Abu Ala, may be quitting.

"Promoting peace and securing Israel require hard work, day in and day out," Biden said in criticizing the administration's performance. "Benign neglect punctuated by episodic engagement imperils American strategic interests in the region."

Powell, on the other hand, defended the administration's record as he stood outside the State Department entrance, taking questions from reporters.

He said the administration supported both Palestinian prime ministers but they were not given real executive power and were unable to consolidate security forces.

"The fault for this is at the feet of Chairman Yasser Arafat," Powell said.

Meanwhile, a senior U.S. diplomat, David M. Satterfield, told the committee that the unrest in Gaza reflected a "clash of personalities" and not a struggle over making sorely needed changes in the Palestinian leadership to promote peacemaking with Israel.

Progress toward Palestinian statehood depends on a leadership change that will strengthen Palestinian security and block suicide attacks on Israel, Satterfield testified.

Due soon to take the post of U.S. ambassador to Jordan, Satterfield said the administration was trying hard to promote a two-state solution to the Palestinian-Israeli conflict but "the parties have the responsibility of taking steps" toward that goal.

There has been very little effort by the Palestinian Authority to address security, Satterfield said, "but we will continue to push them because as Israeli withdrawal from Gaza draws closer, it becomes increasingly vital that the Palestinian Authority be prepared to take over and maintain law and order and stability in Gaza."

Under the plan proposed by Prime Minister Ariel Sharon, all 7,500 Israeli Jews who live in the territory, and the Israeli troops there to protect them, will be withdrawn. The settlements will be turned over to the Palestinians.

Satterfield, while registering administration support for the plan, cautioned Sharon that "it can't be Gaza first and Gaza last," meaning that Israel would be pressed to withdraw on other fronts, as well. Sharon, over some strong protest from Israeli militants, has offered to disband a half-dozen West Bank settlements while surrendering Gaza.