RAMALLAH, West Bank -- Palestinian Prime Minister Ahmed Qureia told Yasser Arafat Tuesday he would continue in his post, but only temporarily in a caretaker capacity, Cabinet ministers said.
In an angry confrontation in the Palestinian leader's office, Qureia insisted his resignation stands unless Arafat yields more power to the Cabinet, Palestinian officials said.
Arafat was equally insistent that he rejected Qureia's resignation, said Saeb Erekat, a senior Cabinet minister.
"President Arafat insisted in rejecting the resignation. Abu Ala insists on his resignation. The crisis goes on," Erekat said, using Qureia's common name.
Qureia exited through a rear door to avoid reporters, leaving it unclear how long he would remain in the post or what his next move will be.
At the stormy Cabinet meeting, some ministers quoted Qureia as saying he accepted Arafat's rejection of his resignation, which he submitted three days ago amid growing chaos in Gaza ahead of a planned Israeli pullout and discontent over disorder in the Palestinian security services.
But Qureia was clearly angry that Arafat refused to yield power over the security forces, and at the lack of authority the Cabinet has to make and carry out decisions.
He told the Cabinet he saw himself only as a caretaker premier, ministers said, indicating that the un-derlying problems re-mained unresolved.
Qureia "told Arafat that his government must have real authority, especially over the security branches in order for it to be effective," said Qadoura Fares, a minister without portfolio.
"Arafat decided to reject Abu Ala's resignation, and renewed his confidence in him," said Arafat's aide Nabil Abu Rdeneh. "Accordingly, the resignation is officially rejected."
Arafat, who is president of the Palestinian Authority, attended the meeting but made no comment afterward. The session was held in his headquarters, where he has been sequestered for two years in his shell-shattered compound.
The Cabinet crisis exploded after a series of kidnappings and violent demonstrations in Gaza last week, followed by Arafat's reshuffling of top security posts.
Arafat announced a consolidation of the security services, but ensured that his loyalists were in key positions. He appointed his widely disliked cousin, Moussa Arafat, to the top security job in Gaza.
On Monday, Arafat reinstated the officer his relative replaced -- Abdel Razek al-Majaide -- but retained Moussa in a powerful position, satisfying some of his critics but infuriating others.
The United States and other Mideast peace sponsors had urged a streamlining of the security services under the authority of the Cabinet as a prerequisite for reviving the deadlocked peace process.
Interior Minister Hakam Balawi stormed out of Saturday's Cabinet meeting, complaining that his position was powerless. Qureia told Arafat that Balawi couldn't even hire a policeman on his own authority, other ministers reported.
The Cabinet was sending a powerful delegation to Gaza to try to restore calm, scheduling meetings with militant groups, security officers and political factions.
The Gaza turmoil was precipitated by Israeli Prime Minister Ariel Sharon's plan to withdraw the military and evacuate the Jewish settlements in Gaza next year, leaving a power vacuum and prime property up for grabs.