The Palestinian prime minister told Yasser Arafat (search) on Tuesday he's determined to quit unless the Palestinian leader yields more power to the Cabinet, leaving the government embroiled in crisis.

The confrontation between the Palestinian leader and Prime Minister Ahmed Qureia (search) centers on whether Arafat is willing to cede any of his absolute authority. Israel considers Arafat's stranglehold on Palestinian affairs as an obstacle to Mideast peace.

At the end of an emergency meeting in Arafat's ruined West Bank (search) headquarters, the two men deadlocked over who would have ultimate control over the security services and whether Qureia would stay in his job.

"President Arafat insisted in rejecting the resignation. Abu Ala insists on his resignation. The crisis goes on," Saeb Erekat (search), a senior Cabinet minister, told The Associated Press, using Qureia's common name.

Other ministers said Qureia ended the meeting by telling Arafat, "my resignation stands. I consider my government a caretaker government."

The crisis has been brewing since late last week, when Qureia submitted his resignation in frustration over the breakdown of authority in Gaza and discontent over the disorder in the security services.

If he resigns and the government falls after less than a year in office, it would be a setback for Arafat, who wants to show some movement toward establishing democratic institutions in the Palestinian territories.

The first prime minister of the Palestinian government, Mohammed Abbas, resigned after just four months because he found himself without any effective power.

Israel and the United States refuse to deal with Arafat, and Prime Minister Ariel Sharon says the lack of a Palestinian negotiating partner was one reason for his decision to unilaterally withdraw from the Gaza Strip next year. He has not met Qureia since he became Palestinian premier.

Israel has confined Arafat in his Ramallah office building for more than two years. Most other buildings in the compound were destroyed in Israeli attacks and raids.

Most Palestinians consider Arafat their main symbol of struggle and independence, though many disagree with his latest moves.

Qureia "told Arafat that his government must have real authority, especially over the security branches, in order for it to be effective," said Qadoura Fares, a minister without portfolio.

Qureia left the meeting through a rear door to avoid reporters, leaving it unclear how long he would remain in the post or what his next move will be.

Arafat aide Nabil Abu Rdeneh said Arafat decided not to accept Qureia's resignation, "and renewed his confidence in him."

Tension has been building in Gaza since December, when Sharon pledged to withdraw the army and vacate Jewish settlements without coordinating with Palestinian authorities — leaving a Palestinian power vacuum and setting competing forces against each other.

In Washington, Deputy Assistant Secretary David M. Satterfield told the Senate Foreign Relations Committee he Palestinian Authority had made little effort to address the security problems in Gaza. "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," Satterfield said.

Over the weekend, Arafat announced a consolidation of the Palestinian security services, but put his loyalists in key positions. He appointed his widely disliked cousin, Moussa Arafat, to the top security job in Gaza.

On Monday, Arafat reinstated the officer his relative had replaced — Abdel Razek al-Majaide — but retained Moussa Arafat in a powerful position, satisfying some of his critics but infuriating others.

The United States and other Mideast peace sponsors have urged a streamlining of the security services under the authority of the Cabinet as a prerequisite for reviving deadlocked peace negotiations.

Interior Minister Hakam Balawi stormed out of a weekend Cabinet meeting, complaining his position was powerless. Qureia told Arafat that Balawi couldn't even hire a policeman on his own authority, other ministers reported.

In Jerusalem, the head of the Israeli internal security service, Aviv Dichter, told a closed meeting of a parliament committee that Sharon's plan has incited a dangerously hostile reaction among some Jewish settlers.

"He said there were dozens of people, with the backup of maybe 150 more, who want to see the prime minister dead," committee member Ran Cohen told Israel Radio on Tuesday.

Although Dichter said his agents had not uncovered specific plots against Sharon, parliament members believe he is mindful of the intelligence community's failure to prevent the 1995 assassination of Prime Minister Yitzhak Rabin by an Israeli extremist opposed to his peace policies.