THE Palestinian authority plunged deeper into crisis yesterday when parliament called on Yasser Arafat to accept the resignation of his prime minister and militants kidnapped a senior official in the West Bank.

The Palestinian parliament today called on Yasser Arafat to accept the resignation of his prime minister and cabinet, adding to a week of political chaos and violence in the West Bank and Gaza Strip.

GUNMEN burned down the offices of Yasser Arafat's Palestinian Authority in Gaza yesterday, as anger spread over the Palestinian leader's overhaul of his security forces that many saw as falling short of genuine reform.

PRESIDENT Yasser Arafat extended the term of a Palestinian emergency government yesterday in a sign he expected a power struggle with his prime minister to delay creation of a new cabinet.

Palestinian leaders were today locked in a power struggle triggered by Yasser Arafat’s attempt to hand control over all the security forces to a loyalist in apparent hope of sidelining the US-backed Palestinian security chief, officials said.

Israeli troops backed by tanks and attack helicopters raided a Gaza Strip town today, killing two Palestinians during fierce fighting and demolishing abandoned buildings and the exterior wall of a hospital, Palestinian officials and the army said.

Israel sent tanks into central Gaza early today, blowing up a building in one refugee camp and searching another, hours before a special session of the Palestinian parliament.

Israel's national bus company is to sue Yasser Arafat for at least €20m in damages caused by dozens of Palestinian attacks and suicide bombings.