RAMALLAH, July 18: Palestinians are witnessing a breakdown in law and order that threatens to destroy the fabric of their society and which cannot merely be blamed on the Israeli occupation , officials said on Sunday.

Veteran leader Yasser Arafat tried to stem the damage on Saturday after an unprecedented spate of kidnappings by announcing a long-awaited revamp of the security services, cutting the number of branches from eight to three.

But the move appears to have merely inflamed the situation with protests breaking out in both the Gaza Strip and West Bank against his decision to install his nephew Musa at the helm of the main general security service.

The Al-Aqsa Martyrs Brigades, a group which pledges loyalty to Arafat, trashed the local offices of the military intelligence service in the southern Gaza town of Khan Yunis overnight in what they said was a message that Musa Arafat's appointment would not be accepted.

Palestinian officials still instinctively blame the Israelis for much of the unravelling chaos, pointing out that Prime Minister Ariel Sharon's government has smashed much of the security infrastructure.

In a statement issued after the arson attack in Khan Yunis, military intelligence service chief General Amin al-Hindi's office said "what we are seeing is a result of the continuing frustration in the face of Israeli aggression."

It's an argument that also rings true to some on the left of Israeli politics. The former Israeli justice minister Yossi Beilin said that Sharon's government had to take a large slice of the blame in the territories for having "systematically demolished the Palestinian Authority's infrastructure" in the pursuit of Palestinian militants.

"As long as a state of anarchy persists at the heart of the Palestinian Authority, it will be their neighbours (the Israelis) who end up paying the price," said Beilin who now leads the dovish Yahad party.

But even some prominent Palestinians now acknowledge that a deep malaise is setting in and that the problems cannot all be laid at the door of Israel. Negotiations minister Saeb Erakat described the current situation as "heartbreaking."

"I have been warning against lawlessness and militias for a long, long time," he told Israeli radio. "This is a society whose social fabric is being destroyed." Sofian Abu Zaida, a senior member of Arafat's Fatah organization and a former minister, indicated that it was time for changes at the top.

"What is new since yesterday (Saturday) is that for the Palestinians, there are no more sacred cows," he said. "The people are just fed up." "The respect in which we hold Yasser Arafat as a symbol of the Palestinian struggle will always remain and is still sacred. What cannot go on any longer is his method of administration."

Arafat blocked attempts by former prime minister Mahmud Abbas and his security chief Mohammed Dahlan to wrest control of the security services, eventually forcing the pair to quit last September.

Dahlan was widely admired by the United States and few people are writing off the prospects of his return to the scene, especially after the planned evacuation of all Israeli troops and settlers in Gaza by the end of next year.

Colonel Yussef Issa, Dahlan's former deputy when he ran the preventive security service in Gaza, said Arafat's shake-up had merely seen "one corrupt guy replaced by another corrupt guy" in a tacit reference to Mussa Arafat.

He told journalists that the Palestinians were being gripped by "a national paralysis", adding that the situation was becoming "untenable for a population which has suffered from Israeli occupation, internal anarchy and the corruption of power." -AFP