In a ballot of Likud's central committee, Sharon's proposed coalition with Labour, which is supportive of his plans to withdraw settlers and troops from Gaza, was rejected by 58 per cent of members. An alternative motion, which would have authorised the Israeli leader to negotiate with any Zionist party, was defeated by 19 votes. The ballot results have provoked speculation that elections, not due until 2006, could now be called within six months. Despite authorising on 17 August the construction of 1,000 settler homes in the West Bank in what is seen as an effort to appease Likud hardliners, Sharon pledged to press ahead with his disengagement plans.

The political difficulties confronting Sharon's Palestinian counterpart have also snowballed in recent weeks, forcing Arafat to make a rare admission of fallibility and admit that 'no real effort' has been made to enforce law and order under his tenure. 'Some unacceptable mistakes have been made by our institutions and some have abused their positions and violated the trust that has been placed in them,' said Arafat in a keynote speech at his West Bank headquarters.

Arafat's dramatic speech came in the wake of the resignation of two government ministers in early August. Just days after the Planning Minister Nabil Qasis resigned to take up a position as head of a West Bank university, Justice Minister Nahed al-Reyes on 7 August tendered his resignation in protest at Arafat's reluctance to share power. The departures followed Arafat's refusal to accept Prime Minister Ahmed Qurei's decision to quit on 17 July, and a subsequent call from the Palestinian legislative council (parliament) for a new government to improve law and order. Qurei's resignation was provoked by Arafat's unwillingness to relinquish control of security, and followed the Palestinian leader's nomination of a close relative to head the security services. Arafat's speech, though not outlining specific measures, pledged his support of the prime minister in his attempts to tackle the security situation and committed the Fatah party leader to a renewed effort to reform his government.