THE new Palestinian Cabinet, stacked with ministers hand-picked by Yasser Arafat, is set to win approval by parliament this week but may have trouble renewing talks with Israel, lawmakers said yesterday.

INTELLIGENCE officials in Washington warned lawmakers a week ago to expect a terrorist attack in Saudi Arabia, it was reported yesterday.

Palestinian prime minister Ahmed Qureia announced the formation of a Cabinet today, backing down from a bitter confrontation with Yasser Arafat and leaving the veteran Palestinian leader in firm control of the security forces.