RAMALLAH, April 23: Palestinian President Yasser Arafat and his prime minister-designate agreed on Wednesday on the makeup of a reform cabinet, defusing a power struggle delaying a new Middle East peace plan.

“Arafat and brother Abu Mazen have sorted out their differences,” said Tayeb Abdul-Rahim, a senior aide to Mr Arafat, after last-minute mediation efforts by a senior Egyptian envoy which finally broke the impasse.

He said that under the deal, prime minister-designate Mahmoud Abbas, also known as Abu Mazen, would also serve as interior minister while Mohammed Dahlan, the powerful former Gaza security chief, would be in charge of security affairs.

Yasser Arafat had rejected any role for Mr Dahlan, whom he sacked last year, but apparently yielded to pressure from the peacemaking “Quartet”, led by the United States, which deemed Dahlan a key to curbing militants opposed to negotiating peace with Israel.

The United States had said it would not present a new “road map” peace plan until Palestinians installed a new government committed to democratic reforms, rooting out corruption and ending the Palestinian uprising.

Washington and the European Union view Mahmoud Abbas, a former peace negotiator and perceived moderate, as critical to the reforms they hope will encourage Israel to withdraw forces from Palestinian cities and curb Jewish settlement construction.

The “road map” prescribes a series of such steps leading to a Palestinian state in the West Bank and Gaza Strip by 2005.

The Palestinian parliament will meet “probably Sunday or Monday” to ratify the new cabinet of up to 24 ministers, said Nabil Shaath, planning minister in Arafat’s outgoing cabinet who said he would be foreign minister in the new one.

Abbas shook hands with Arafat in the president’s office to seal the pact. A grinning Arafat emerged arm-in-arm with Abbas and Egyptian mediator Omar Suleiman, but none spoke to reporters.—Reuters