Yasser Arafat was facing a mounting challenge to his authority yesterday amid rebellion in the Gaza Strip against corruption and incompetence, and a threat by the Palestinian prime minister to bring down the government if he is not given more power.
Last night in southern Gaza, scores of Palestinian gunmen in Rafah refugee camp battled forces loyal to Mr Arafat's new security forces chief, whose appointment over the weekend sharpened bitter rivalries.
Initial reports of some of the worst internal Palestinian violence for years said several people had been hurt in the assault on security headquarters in the Rafah camp. Earlier armed men razed a security post in Khan Yunis and thousands marched across Gaza to demand reform.
The crisis broke into the open with a spate of kidnappings on Friday to protest against the security situation. Mr Arafat responded by appointing a cousin to head the security forces, prompting more protests.
On Saturday the Palestinian prime minister, Ahmed Qureia, resigned saying Gaza was in the grip of "unprecedented chaos". The two men met for several hours yesterday after Mr Arafat refused to accept the resignation. But Mr Qureia said he would go anyway unless the Palestinian leader gave the government greater powers, particularly control over the security forces.
The Palestinian cabinet is to discuss the crisis today.
"There is a consensus in the Palestinian nation and not just in Gaza that what is happening now can't continue," Sufian Abu Zaideh, a Fatah leader in Gaza, told Israel radio. "Things have changed in the last two days. There are no more sacred cows. People are simply fed up."
The kidnapping episode started when the territory's police chief, Ghazi Jabali, was abducted on Friday by the al-Aqsa Martyrs Brigade, which accused him of corruption.
Mr Arafat sacked Mr Jabali but his replacement with another close associate of the Palestinian leader and, separately, the naming of Moussa Arafat as head of the main security force in Gaza prompted demonstrations and violence.
The al-Aqsa Martyrs Brigade, an offshoot of the Palestinian leader's Fatah movement, accused Moussa Arafat of corruption when he was head of military intelligence in Gaza. "Moussa Arafat's appointment will not pass, and he must submit his resignation," the group said.
The head of the Palestinian coastguard resigned in protest yesterday. On Friday two security officials also quit.
"This is infuriating," said Mr Abu Zaideh. "This shows disregard for people and their opinions. This is intolerable disregard, and in Gaza, thousands will rise up against this decision."
Yesterday Moussa Arafat said he had no intention of quitting and that he was prepared to fight all "potential enemies". He sent his forces to seize control of television and radio stations and the main police stations in Gaza.
"I take my orders from his excellency, President Arafat. The one who appointed me is the only one who can ask me to quit my job," he said.
Mr Qureia's resignation after 10 months in the job follows hefty foreign pressure on Mr Arafat to implement political reforms that would help revive the peace process and undercut Israel's claim that there is no fit Palestinian government to negotiate with.
Last week, the UN's Middle East envoy, Terje Roed-Larsen, told the security council that the PA is in "real danger of collapse" because Mr Arafat had blocked political reforms.