Palestinian PM Salam Fayyad steps down

  • Palestinian Prime Minister Salam Fayyad announced his resignation on Saturday following a long-running dispute with President Mahmoud Abbas.

    According to Palestinian news agency Wafa, Abbas accepted the resignation after they met in person.

    However, he has asked Fayyad to remain as caretaker until a new government is formed.

    The two men have locked horns over economic policy after Finance Minister Nabil Kassis stepped down last month.

    Fayyad accepted Kassis's resignation but Abbas overruled his decision.

    Fayyad's resignation comes as a major blow for U.S.-led efforts to restart peace negotiations with Israel.

    Abbas is expected to name a new prime minister over the coming week.

    Fayyad, 61, served as prime minister of the Palestinian Authority since 2007. A former International Monetary Fund official, he is respected among international organizations and donors.