In an early reaction to the resignation of Opalestinian Prime Minister Mahmoud Abbas, the Israeli government said it would not deal with any Palestinian leadership dominated by Mr Yasser Arafat.
"The resignation of Palestinian Prime Minister Abbas is an internal Palestinian matter ... [But] Israel will not accept a situation where control of the Palestinian Authority is returned to Arafat or anyone who does his bidding," said a statement by the office of Israeli Prime Minister Ariel Sharon.
Mr Abbas's exit and Israel's reaction puts the viability of the internationally-sponsored "road map" for peace into serious question.
Mr Abbas has been an outspoken critic of Palestinians' use of violence during the three-year-old uprising against Israeli occupation, and his appointment was crucial in getting the Israelis to back the road map.
He co-authored interim peace deals a decade ago that gave Palestinians limited self-rule, and was the choice of political forces ranging from reform-minded parliamentarians to international mediators.