Israel: Palestinian Authority President Mr Yasser Arafat's rejection of a cabinet proposed by newly-appointed Prime Minister Mr Mahmoud Abbas could delay the publication of the internationally-backed "road map" for peace in the Middle East.
The cabinet shunts aside a number of the Palestinian leader's loyalists.
However, the plan also faces difficulties on the Israeli front. A senior aide to Prime Minister Mr Ariel Sharon met the US National Security Adviser, Ms Condoleezza Rice, in Washington yesterday to present the Prime Minister's reservations regarding the plan, which is backed by the US, UN, EU and Russia.
Mr Sharon said in an interview on Sunday he had "14 or 15" reservations regarding the plan.
There was a meeting of the PLO central committee in Ramallah late on Sunday over a new cabinet, disbanded after Mr Arafat demanded changes to the list proposed by Mr Abbas (also known as Abu Mazen).
Mr Arafat is said to be particularly unhappy with Abu Mazen's plan to appoint Mr Mohammed Dahlan, the former head of security in the Gaza Strip, as minister in charge of the Palestinian Preventive Security, and to demote Interior Minister Mr Hani el-Hassan, who is close to him.
President Bush has made the publication of the road map conditional on the appointment of a Palestinian Prime Minister, who would assume some of the powers now vested in Mr Arafat, and the formation of a new cabinet.
There have been reports that Mr Arafat is trying to undermine the efforts of Mr Abbas, long recognised as his number two in the PLO, to reform the governing bodies of the Palestinian Authority.
There was no direct contact between the two men for much of yesterday, with intermediaries carrying messages between them.