Meanwhile, representatives of Arab regional offices for the boycott of Israel opened a two-day meeting in Damascus on Monday aimed at reviving a ban against companies that do business with the Jewish state, and An Israeli government spokesman says a deal between Israel, the Palestinian Authority and British Gas to drill for natural gas off Gaza could be finalized within a month.
The Palestinian constitutional crisis — described as the most severe ever between the two — threatens to torpedo a U.S.-backed "road map" to full Palestinian statehood within three years.
Abbas, who must win parliamentary approval for his Cabinet by Wednesday, has threatened to resign if his team is not accepted. The United States, in turn, has said it will only present the peace plan once Abbas and his Cabinet have been installed.
The main dispute is over the appointment of Mohammed Dahlan, a former security chief in Gaza. Abbas wants to give Dahlan a key security post, while Arafat wants to keep a confidant, Hani al-Hassan, in the job. The new security chief would have to supervise a crackdown on Palestinian militants, a prerequisite for moving ahead with the internationally backed peace plan.
On Saturday, Abbas stormed out of a meeting with Arafat after the Palestinian leader refused to support Dahlan's inclusion in the Cabinet. Israel and the United States back Dahlan, who has said he is confident he can rein in the militants.
Al-Hassan does not have much international support, and as interior minister in the past few months has not succeeded in halting attacks by militants on Israelis.
Qadoura Fares, a Palestinian legislator, said there are no real alternatives to Abbas because no one else has his standing.
"At the moment, there is no agreement (on a Cabinet), but in the end, we are talking about 48 hours, they have to find some compromise. There is no time to be hesitant and to delay processes that are so important," Fares said.
The wrangling is over more than Cabinet appointments. If Abbas prevails, it would suggest he can pursue an independent policy. If Arafat wins, it may mean Abbas is little more than a figurehead.
Ahmed Khazaa, commissioner general of the 50-year-old Damascus-based Central Boycott Office, said at the opening session that the meeting was being held under "very complicated and delicate circumstances" due to the U.S.-British war on Iraq and the "escalating repressive Israeli measures against the Palestinian people."
He said Israel was still denying Palestinians their rights and was still in violation of international resolutions and said Arabs should support the Palestinians' struggle by supporting the boycott.
The meeting, which brings together representatives from 15 Arab states, will discuss the Arab-Israeli conflict and ways of providing financial assistance to the Palestinian uprising. Participants will also consider blacklisting new companies that do business with Israel.
Plans to explore what are believed to be vast gas fields off Gaza had been put on hold since the outbreak of Israeli-Palestinian fighting nearly 31 months ago.
Israeli confidence was boosted by assurances from Palestinian Finance Minister Salam Fayad that Palestinian revenues would be placed in an account under his control, said Benny Rom, a spokesman for Israel's Infrastructures Ministry.
Fayad's letter to Israeli Infrastructure Minister Yosef Paritzky and Finance Minister Benjamin Netanyahu "will give a push" to an agreement, under which Israel would buy much of the natural gas, Rom said. The Israeli government is optimistic the deal can be closed soon, he said.
Israeli officials previously expressed concern that Palestinian profits would be funneled to militants who have carried out scores of attacks against Israelis.