Palestinian Prime Minister Ahmed Qurie suggested Sunday he would quit next month after agreeing to head a 30-day caretaker cabinet, stoking uncertainty over a U.S.-backed plan for peace with Israel.

Palestinian political chaos triggered by power struggles between President Yasser Arafat and reform-minded deputies has combined with intractable violence on the ground to stymie the "road map" to a Palestinian state in Israeli-occupied territory.

Asked about his plans following a meeting of Arafat's Fatah faction, Qurie said: "The same (five-day-old) government will continue for another 25 days, and after that there will be a new government and a new prime minister also."

But officials close to Qurie said he was not necessarily ruling out continuing in office if he obtained the cabinet roster of his choice. Negotiations to overcome Qurie's differences with Arafat were likely in the coming weeks.

After three days of fighting that killed eight Palestinians and left more than 1,000 homeless, Israel withdrew most forces from the large Gaza Strip refugee camp of Rafah Sunday, three days after they swooped on suspected arms-smuggling tunnels.

Palestinian militants operating elsewhere in Gaza fired three Qassam rockets into the nearby western Negev desert region of Israel. No casualties or serious damage were reported.

Aides to Arafat, 74, said he had fully recovered from a stomach illness and chaired a meeting of Fatah's executive that sewed up a deal for Qurie to run the emergency cabinet for 30 days without an interior minister.

The accord put in abeyance Qurie's threat last week to resign over Arafat's rejection of his nominee for interior minister, Nasser Youssef. The interior minister would oversee any steps to rein in militants hostile to peace negotiations.

Youssef wants more powers than Arafat is prepared to give him. Israel, saying Arafat foments violence, refuses contact with him and has threatened to "remove" him after a renewed spate of suicide bombings. He denies inciting militants.

WANTED BROAD CABINET

Qurie, whose predecessor lost a tug-of-war with Arafat over security powers, wanted a broad cabinet endorsed by parliament to help rally the public behind possible moves to end "armed chaos," not a pared-down Fatah group decreed by the president.

A senior Palestinian official said that after 30 days, Qurie would opt either to extend the state of emergency declared by Arafat after Israel's threat to "remove" him, or present a normal, expanded cabinet to MPs for ratification.

Israeli military sources said the army had withdrawn about 80 percent of the forces that plowed into Rafah, but the remainder continued to hunt for tunnels used by Palestinian militants to slip arms in from nearby Egypt.

Residents said there had been no electricity, running water or telephone service in the teeming, cinder-block refugee camp for 48 hours after Israeli forces knocked out generators providing power to the impoverished community of 70,000.

Peter Hansen, head of the United Nations Relief and Works Agency serving Palestinian refugees, told Reuters that "between 1,000 and 2,000 people have been left with nothing whatsoever."

About 120 homes or blocks of flats were flattened and dozens more severely damaged, Hansen said during a tour. Most residents live with several generations of relatives under one roof.

Palestinians accused Israel of indiscriminate destruction amounting to collective punishment. Israel denied such charges. A military source said 10 homes were demolished either because a tunnel opening was found inside, the building was booby-trapped by militants or was used to fire at troops.

He said other buildings may have been destroyed by proximity to shock waves from demolitions or by rocket and grenade gunfire from militants, "most of which missed our forces."

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