Palestinian President Yasser Arafat agreed to divide security powers between the interior minister and a national council today, a move designed to resolve a power dispute and pave the way for a new government.
The breakthrough, which is hoped to satisfy US calls for reforms in a "road map" for peace with Israel, coincided with fresh violence in which Israeli soldiers shot and killed three Palestinians in the West Bank and Gaza Strip.
Palestinian Prime Minister Ahmed Koreihad proposed that Mr Hakam Balawi, favoured by Mr Arafat's dominant parliamentary faction Fatah for interior minister, give up the portfolio's control over Palestinian security forces.
That authority would instead go to the Palestinian national security council, which is under Mr Arafat's auspices but includes General Nasser Yousef, Mr Qurie's original choice for interior minister who was rejected by Fatah.
"The interior minister will most likely be Hakam Balawi, with responsibility for administrative affairs while security issues will be conducted by the national security council headed by Arafat," Mr Koreitold reporters after meeting Mr Arafat in the West Bank city of Ramallah today.
The Korei-Arafat power struggle had held up formation of a permanent Palestinian government after the 30-day mandate of a emergency cabinet expired this week, further stalling the road map that has been battered by renewed bloodshed.
Earlier, the Israeli army said it killed two Palestinians spotted near the Gaza Strip boundary. Palestinian security officials said the dead men were not known militants and may have been labourers seeking to sneak into Israel to find work.
In the West Bank, witnesses said Israeli troops shot dead a 19-year-old stone-thrower and wounded two children as troops imposed a curfew in the city of Jenin and conducted searches.