Palestinian Authority President Mahmoud Abbas has not decided who will replace Salam Fayyad as PA prime minister, sources in Ramallah said on Sunday.

Abbas is expected to begin consultations over the formation of a new government as soon as he returns from a visit to Kuwait, which begins on Monday, the sources said.

Fayyad submitted his resignation to Abbas on Saturday, ending months of tensions between the two men over several issues.

The tensions peaked with the resignation last month of PA Finance Minister Nabil Qassis.

Fayyad’s decision to accept Qassis’s resignation angered Abbas, who demanded that the finance minister be reinstated.

“President Abbas will hold consultations with representatives of various political factions over the formation of a new government,” a PA official in Ramallah said.

The official said that Abbas faced two options: appoint a new prime minister or himself head a unity government with Hamas.

If Abbas chooses the first option, the government would consist of independent figures or would be dominated by Fatah officials.

The names of two candidates for the premiership have popped up in recent weeks: Muhammad Mustafa, former chairman of the PLO’s Palestine Investment Fund and Rami Hamdallah, president of An-Najah University in Nablus.

But if Abbas goes for a unity government with Hamas – something that seems unlikely in light of tensions between Hamas and Fatah – he would head the government.

“If negotiations with Hamas over the formation of a unity government achieve progress, then we will have a national unity government,” the PA official told The Jerusalem Post. He pointed out that the most recent reconciliation accord between Hamas and Fatah, which was signed in Qatar in February 2012, envisages the establishment of a unity government headed by Abbas.

The official said that the new government would have to cope with a severe financial crisis resulting from huge debts to banks and failure of donor countries to fulfill their promises to help solve the crisis.

Fatah officials have welcomed Fayyad’s resignation, holding him responsible for the financial crisis in the Palestinian territories.

“It’s time that Fayyad step down,” said Amin Maqboul, a member of the Fatah Revolutionary Council. “We appreciate all his efforts to serve the Palestinians.”

Maqboul and other Fatah officials expressed hope that Fayyad’s departure from the scene would pave the way for the formation of a unity government with Hamas.

Hamas has demanded the removal of Fayyad as a condition for joining a unity government with Fatah.

Fatah, on the other hand, had repeatedly called on Abbas to fire Fayyad from the small Third Way party, and replace him with a prime minister from Fatah.

Muhammad Daraghmeh, a political analyst, predicted that Fayyad’s resignation would not pave the way for unity between the two big movements.

He told the Palestinian daily Al-Quds that the resignation was the result of a power struggle between Fayyad and Abbas.

Another analyst, Talal Okal, did not rule out the possibility that Abbas may ask Fayyad to form a new government.

He, too, said the resignation was not linked to attempts to achieve reconciliation between Hamas and Fatah.

Sufian Abu Zayda, a prominent Fatah official, said that US “stupidity” had contributed to Fayyad’s resignation.

Abu Zayda and other Fatah officials expressed outrage over US attempts to exert pressure on Abbas to keep Fayyad in office.

Last weekend, US Secretary of State John Kerry phoned Abbas and urged him not to accept Fayyad’s resignation – a request that PA and Fatah officials strongly denounced as “degrading.”

“Fayyad did not want to be seen as someone who has been imposed on the Palestinians and Fatah by the Americans,” Abu Zayda said.

“On the other hand, Abbas cannot afford to be seen as someone who succumbed to US pressure.”

Jonathan Schanzer, vice president of research at the Foundation for Defense of Democracies, said Fayyad’s resignation represented a blow to Kerry’s efforts to persuade Abbas to keep him in his position.

“He lobbied strenuously to prevent this, and he failed.

This is a troubling indication of the new secretary of state’s ability to influence events in other areas, such as diplomacy,” Schanzer said.

He added that none of the candidates on the short list to replace Fayyad were viable reformers. “Whether Mohammad Mustafa, [former PA public works and housing minister] Azzam al- Ahmed or even Rami Hamdallah, it is significantly less likely that the new prime minister challenges Abbas on matters of transparency and reform,” he said.

The appointment of a new prime minister would still not satisfy concerns of legislators on Capitol Hill regarding the looming succession crisis in the PA, Schanzer said.

“If Abbas was unfit to lead, the new prime minister would not replace him according to Palestinian law.

Rather, it would be the speaker of the Palestinian Parliament, Aziz Dweik [of Hamas], who would hold the position for 60 days. This would likely trigger a crisis that US legislators are trying to avoid.”

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