RAMALLAH, July 27: Prime minister Ahmed Qorei ended a paralyzing crisis in the ranks of the Palestinian leadership on Tuesday by burying his differences with Yasser Arafat and agreeing to stay on as premier.

Mr Qorei's announcement, which came 10 days after he tendered his resignation, followed extensive mediation efforts by MPs who said they had secured an agreement by Mr Arafat to implement reforms and crack down on corruption.

"President Arafat demonstrated his confidence in me by rejecting my resignation. I value this confidence that he has placed in me and I will therefore continue in my role," Mr Qorei said.

"I hope that we can now work together," the premier added after a meeting of the Palestinian cabinet in this West Bank town that was also attended by Mr Arafat. Mr Qorei handed in his notice on July 17 after a spate of kidnappings in Gaza, including that of the head of the Palestinian police force.

But Mr Arafat refused to accept the resignation and mediators spent the last week trying to persuade the two men to resolve their differences. A committee of MPs held talks with Mr Arafat in Ramallah late Monday at his leadership compound where they secured an agreement for a crackdown on corruption.

"He agreed to publish an order to investigate any corruption file which is brought to him by our committee," one of the MPs, Mohammed Horani, told AFP. Mr Arafat "also said that he would order the publication of a law specifying the roles of the security branches and the division of power between the branches.

"We were pleased with this positive position from President Arafat and we will meet him again next week to see how this is being implemented." Mr Qorei had become increasingly frustrated at Mr Arafat's reluctance to loosen his grip on the control of the security services and at the lack of institutional reforms.

Although Mr Arafat did slash the number of security services from eight to three, the move backfired when he promoted his unpopular cousin Musa Arafat to the post of head of general security - only to demote him after violent protests against the appointment.

A 17-year-old Palestinian teenager who was shot and wounded by security services in one of the protests in the southern Gaza Strip town of Rafah died of his injuries Tuesday.

Mr Arafat has come under increasing international pressure to yield more power to Mr Qorei, with the European Union's top diplomat Javier Solana warning last week that there would be a rethink of the relationship with the 75-year-old leader if Mr Qorei stepped down. -AFP