The Palestinians postponed a meeting of their prime minister, Mahmoud Abbas, with Israeli Prime Minister Ariel Sharon, saying Abbas wanted to consult with Arafat.
And Arafat, the historic leader of the Palestinians, asserted that he — not the prime minister — was in charge of Palestinian negotiations with Israel.
The dispute Tuesday underlined the internal Palestinian power struggle between Arafat and Abbas, whom Arafat grudgingly appointed under international pressure, as efforts to move forward on a new peace plan intensified.
Meanwhile, Sharon backtracked from a controversial statement in which he said Israel must end its "occupation" of the Palestinian territories, reports CBS News Correspondent Robert Berger.
However, a three-way summit in the region still appeared likely next week, to bring President Bush together with Abbas and Sharon.
Jordan's Information Minister Mohammad Affash Adwan said Mr. Bush would meet with Sharon and Abbas in the Jordanian port of Aqaba, on the Red Sea, and then with several Arab leaders at Sharm el-Sheik, an Egyptian resort.
A senior U.S. official said the purpose would be to make headway in implementing the blueprint for an Israeli-Palestinian settlement produced by the United States, the European Union, Russia and the United Nations.
But the White House suggested the president had not yet made a decision.
While the administration tried to minimize the postponement of the Abbas-Sharon meeting as merely technical, Arafat told the PLO's executive committee he wanted to review security proposals before Abbas met again with Sharon.
The move by Arafat supported a worldwide perception that Arafat — no matter how hard the Bush administration tries to marginalize him — is the paramount leader of the Palestinians.
Abbas, who owes his appointment to Arafat, described Arafat recently as the Palestine president.
First, Palestinians called off the Wednesday meeting until Arafat had a chance to discuss Israeli proposals with the PLO executive, which he chairs.
After the PLO executive meeting Tuesday evening, Palestinian Cabinet Minister Yasser Abed Rabbo said the Abbas-Sharon meeting would take place Wednesday as planned.
Then it was Israel's turn to say no.
"There will be no meeting Wednesday," Sharon aide Raanan Gissin told The Associated Press.
Abbas announced Wednesday that the meeting would "most likely" take place on Thursday.
"But at this point in time it has not been confirmed," Abbas told reporters following a meeting with Spanish Foreign Minister Ana Palacio.
Israel Radio reported that the summit would take place Thursday, but officials in Sharon's office said no date had been set and made no further comment.
A member of the PLO executive, speaking on condition of anonymity, explained that the jockeying for position was Arafat's way of telling the United States, Israel and Abbas that Arafat makes the decisions over negotiations with Israel, using the PLO executive to make the point.
Abbas took office April 30 under a new law that gives the PLO executive the right of approval over negotiating steps with Israel. Arafat controls the PLO body, where Abbas is his deputy.
Arafat has been fighting a rear-guard action to limit Abbas' powers, objecting to the makeup of his Cabinet and inserting many of his stalwarts. He retains control of most of the Palestinian security forces and has kept for himself the final word over peace moves.
This counters the Israeli and U.S. intentions to sideline Arafat, charging that he is tainted with terrorism and had led his Palestinian Authority into corruption and inefficiency.
In an interview with the Israeli daily Haaretz, Abbas spoke out in favor of Arafat. "Arafat is the elected president of the Palestinian Authority and should not be isolated," he said, calling on Israel to release Arafat from a virtual house arrest in his West Bank headquarters.
Sharon's use of the word "occupation" set off a storm of criticism in his hawkish Likud party, which saw it as anti-Zionist.
"The term we use is 'disputed' territories," said senior Likud official Gideon Saar. "The Arabs use always the term occupied territories."
Sharon later said he was referring to Palestinians in "disputed" territories — an attempt to differentiate between the people and the territory, a way of underlining his policy that Israel must retain strategic parts of the West Bank.
"We are not occupiers," he said. "This is the homeland of the Jewish people."
Israeli Foreign Minister Silvan Shalom said Tuesday that concrete results could be expected from the three-way summit.
"The President would not bother coming all the way out here to leave without a decision of some kind," Shalom told Israel TV.
Abed Rabbo said he hoped the trilateral summit would result in implementation of the peace plan, called the "road map."
The plan is sponsored by the so-called "Quartet" — the United States, European Union, United Nations and Russia. It calls for a halt to nearly 32 months of bloody Palestinian-Israeli violence and leads to a full Palestinian state in 2005.
Israel conditionally accepted the plan on Sunday, a month after the Palestinians approved the formula and insisted that it be implemented unchanged.
White House spokesman Ari Fleischer said a Bush meeting with the Israeli and Palestinian leaders remained "under active consideration" and hinted at more.
"It's a very hopeful moment, and the president wants to do everything in his power to make it the most hopeful moment possible," Fleischer said.
"The White House, as you know, is sometimes the last to make something official," he said.
Palestinians claim all of the West Bank and Gaza for a state and demand a total Israeli pullout.
Israel has raised 14 reservations about the "road map" plan, including a demand that the United States manage the monitoring of the sides' compliance.