Middle East: After a week-long leadership crisis in the Palestinian Authority which some diplomats feared threatened the road map peace plan, President Yasser Arafat and his Prime Minister, Mr Mahmoud Abbas, met in Ramallah last night and settled their differences, writes Peter Hirschberg, Jerusalem
Palestinian officials said the two agreed that Mr Abbas, who was appointed by Mr Arafat earlier this year under intense international pressure, would retain his powers. They also agreed to co-ordinate fully negotiations with Israel.
The crisis between the two men erupted when members of the ruling Fatah party, headed by Mr Arafat, lashed out at Mr Abbas for being too soft in talks with Israel, specifically on the issue of the release of Palestinian prisoners in Israeli jails.
Mr Arafat even reportedly accused his prime minister of "betraying the interests of the Palestinian people" - a charge he later denied having levelled.
As a result of the criticism, Mr Abbas resigned from the Fatah Central Committee, a key policymaking body in the party, and intimated he might step down as prime minister if the party dictated negotiating tactics with Israel that were unacceptable to him. Last night, Fatah members said Mr Abbas had retracted his resignation.
Israeli leaders have accused Mr Arafat of trying to undermine Mr Abbas, and European officials had expressed concern that tensions between the two men might unravel the road map, especially if they ultimately culminated in the resignation of the Palestinian prime minister.
Meanwhile, Britain's hope of improving relations with Israeli Prime Minister, Mr Ariel Sharon, suffered a blow last night when the British Prime Minister, Mr Tony Blair, was forced to rebuff an attempt by his Israeli counterpart to persuade Britain to sever all contact with Mr Arafat.
In a sign of Britain's fragile relations with Israel after a series of rows, Mr Blair told Mr Sharon over dinner in Downing Street that Britain would continue to deal with the democratically elected president of the Palestinian Authority.
On the first day of a three-day visit to Britain, Mr Sharon tried to win support for his policy of isolating the Palestinian president.
A senior Israeli official accompanying Mr Sharon said: "Any contact with Arafat weakens Abbas."
But a Foreign Office spokeswoman dismissed Mr Sharon's request. "We made clear that the UK position, which is also that of the European Union, is that we will continue to have dealings with Mr Arafat". - (Additional reporting Guardian Service)