Palestinian Authority President and Fatah leader Mahmoud Abbas swore in a new government in the Palestinian territory of West Bank on Wednesday, following a Cabinet reshuffle by his Prime Minister Salam Fayyad.
Although Fayyad retained his premiership in the reshuffle, he shed his finance portfolio and gave it to Nabil Kassis, a former university president. Kassis will now have to deal with a projected $500 million deficit in PA's $1.3 billion budget, which is mostly contributed by the European Union, United States and Arab countries.
The new 25-member Cabinet sworn in on Wednesday has 11 new faces, with their portfolios ranging from Finance, National Economy, Jerusalem Affairs, Health and Justice. Two Ministers from the previous Cabinet were dropped over allegations of corruption.
The latest move by the PA has cast doubts on the implementation of a deal agreed by Fatah and rival Hamas, a radical Islamist group that governs the Gaza Strip, in Qatar in February to form a unity government for administering the two Palestinian territories. The accord was aimed at advancing efforts aimed at the eventual formation of an independent Palestinian state
Under the deal, PA President Mahmoud Abbas was to head a newly-formed interim unity government until a new administration emerged from fresh presidential and parliamentary elections. Nevertheless, disagreements between the two factions over the appointment of the unity government made up of technocrats and independents have stalled its implementation.
The agreement reached in Qatar was based on a reconciliation pact signed by the two rival factions in the Egyptian capital Cairo in April last year. The move was intended to pave way for the formation of a joint interim government ahead of national elections, which were originally planned to be held before the end of this month in the Gaza Strip and the West Bank.
Soon after the new West Bank government was sworn in, Hamas strongly criticized the move and warned that it could derail the reconciliation process agreed by the two factions. It urged the PA to immediately form a unity government headed by Abbas in line with the Qatar deal.
In response, Abbas said he had not given up on the reconciliation deal reached with Hamas, and said: "If we have an agreement with Hamas tomorrow or afterwards, this government will not have any role."
"But I cannot wait forever. A number of Ministers have resigned from the current government, and the administrative situation has paralyzed it, which forced me to announce this [new] government," Abbas told reporters in Ramallah.
Notably, Israel had warned earlier that any move by the PA To form a unity government involving Hamas could undermine any attempts to revive its currently stalled U.S.-initiated peace negotiations with the Palestinians.
The peace talks, which resumed in Washington seven months ago after a gap of nearly two years, were aimed at finding an amicable solution to the decades-long Palestine-Israeli conflict. The talks are presently deadlocked over Israel's refusal to extend a construction freeze in the West Bank after it expired on September 26.
Hamas was not involved in those negotiations. Both Israel and the West, including the United States, engage in negotiations only with the more moderate Fatah faction, and prefer to channel their aid to the Palestinians though Fatah-led Palestinian Authority government in the West bank. Hamas came to power in the Gaza Strip in June 2007, ousting the more secularist Fatah.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.