Israel is now inclined to allow east Jerusalem Arabs to vote in next month's Palestinian Authority legislative elections from post offices, a senior government official said Saturday night. The change in policy comes less than a week after reports that Israel would not allow this type of voting led to PA threats to call off the elections. The official said that while no final decision on the matter had yet been made, Jerusalem was considering following the same modalities in the upcoming elections as were used during the January 2005 PA elections for chairman and the 1996 PA legislative elections. The issue, he said, was much more symbolic than practical, since so few east Jerusalem Arabs actually voted in the post offices in the last elections. He said Israel was considering allowing the balloting despite Hamas's participation so that Israel would not be blamed for torpedoing the elections. Last week, Israeli officials told Belgian European Parliament member Veronique De Keyser, head of the EU delegation here to observe the elections, that Israel might not allow voting in east Jerusalem were Hamas allowed to participate. This position, championed by the Prime Minister's Office, was at odds with the position staked out by the Foreign Ministry. The Foreign Ministry recommended that the procedures used in January 2005 and 1996 be used this time as well. During the elections in January some 5,000 east Jerusalem Arabs were eligible to cast ballots in east Jerusalem post offices, and another 100,000 could vote outside of the city. All told, however, only some 1,200 people voted in the post offices, and only some 5,000 at polling places set up outside the city. Meanwhile, the crisis in Fatah took a new turn over the weekend with the announcement by Palestinian Authority Prime Minister Ahmed Qurei that he was dropping out of the parliamentary race. Qurei, however, said he would stay in his post as prime minister. Qurei reportedly withdrew his candidacy in protest against PA Chairman Mahmoud Abbas's intention to exclude representatives of the old guard in Fatah from a new list that would be headed by jailed Fatah leader Marwan Barghouti. Earlier this month, Barghouti, who is serving five life terms for his role in terror attacks, formed a new list called al-Mustaqbal together with young guard Fatah activists. Barghouti's decision has posed a serious challenge to Abbas and veteran Fatah leaders, who have long been accused of refusing to give grassroots activists a larger say in decision-making. Shortly after Barghouti announced his list, the Fatah central committee, a body dominated by old-timers in the ruling party, announced its own list, further deepening the crisis and undermining its chances of winning the vote. Abbas has been trying over the past week to persuade Barghouti and his supporters to run under one list. Abbas, according to some of his aides, agreed to remove old guard leaders from the new list in favor of Barghouti's candidates. The veteran leaders, including Qurei, were told that they should run on regional lists rather than nationwide lists - a move that could affect their chances of being elected. Half of the 132 parliament seats will be elected through constituencies, the other half through party lists. On Friday, Qurei, who was supposed to run in Fatah's nationwide list, sent a letter to Abbas informing him of his decision to quit. In addition to Qurei, Speaker of the Palestinian Legislative Council, Rouhi Fattouh, dropped out of the race in protest of Abbas's "capitulation" to Barghouti and his friends. Sources close to Qurei and Fattouh said more old guard representatives were expected to follow suit. "After facing a revolt by the young guard, Abbas is now facing a rebellion from the old guard in Fatah," a senior Fatah official told The Jerusalem Post. "The old guard is now demanding that the elections be postponed because of the continued power struggle in the party." Qurei told reporters in Ramallah on Saturday that the parliamentary election should be postponed because of Israel's opposition to the participation of Jerusalem's Arab residents. "I'm opposed to holding the elections under the current circumstances," he said. "How can we hold elections when Jerusalem is being excluded?" Referring to his decision to withdraw his candidacy, Qurei said he originally had no plans to contest the vote. "I never presented my candidacy for the elections," he explained. "The Fatah central committee decided that I should run, but I wasn't convinced." Qurei also denied allegations that his resignation was in response to Abbas's refusal to place him at the head of Fatah's list. "It's disgraceful and unacceptable to say that I'm unhappy because of my position on the list," he said. "This issue should not even be raised." PA National Security Adviser Jibril Rajoub, who is running on Barghouti's list, welcomed Qurei's decision to drop out of the race, saying it would help resolve the crisis in Fatah. "His decision will facilitate efforts to unite the two [Fatah] lists," he said. "Qurei insisted on heading the Fatah list and this was the major obstacle to unity. This would have harmed Fatah's chances of winning."