JERUSALEM -- Yasser Arafat is considering a Palestinian billionaire without political clout as prime minister, but has been told by his Fatah movement that it will only accept PLO deputy chief Mahmoud Abbas in the job, officials said Tuesday.

The wrangling is not just over names, but over whether the prime minister will have real power to set policy. A powerful prime minister could help restart peace negotiations, satisfying U.S. demands for a new Palestinian leadership and sidestepping Israel's boycott of Arafat, whom it brands a terrorist.

Fatah commands a majority in the Palestinian parliament, which will have final say next week over defining the prime minister's authorities. Legislators also have the power to reject any Arafat appointee. Some have expressed fears that Arafat would try to appoint a puppet prime minister.

Abbas, a moderate and possible Arafat successor, also has Israel's support. He has said the 29-month-old armed Palestinian uprising was a major mistake and has called for an unconditional halt to all attacks on Israel. He was not available for comment Tuesday.

Arafat, who did not respond to the demand, is considering Palestinian oil billionaire Monib al-Masri for prime minister. An al-Masri associate said the businessman, who has no apparent political ambitions, has been approached about the job. Al-Masri, a longtime Arafat friend, has turned down previous offers to serve in the Cabinet.

Al-Masri, 65, said Tuesday he has not been offered the prime minister's job formally, but that he expected to meet with Arafat soon. Al-Masri said he was considering the idea, and was consulting with family and friends.

Al-Masri made most of his money in the oil business. Using his close ties with Arab governments, especially in the Persian Gulf, he has served as Arafat's troubleshooter from time to time. He comes from an influential family based in the West Bank city of Nablus, but has spent much of his life abroad.

Palestinian officials, speaking privately, said there is concern al-Masri would simply do Arafat's bidding. Arafat critics have said they fear the Palestinian leader will either try to appoint a weak prime minister or strip the post of real powers.

For months, the autocratic Arafat resisted the idea of creating the post, which would force him to share power -- even though it was popular among Palestinians as well. He only relented last month, under intense pressure from international mediators.

Arafat's decision to involve the PLO in the process has also fueled suspicion.

On Saturday, two days before the convening of the Palestinian legislature, the PLO's Central Council will discuss the authorities of a prime minister. The PLO body, which is controlled by Arafat, has no formal say, but its recommendations could carry much weight since the PLO represents all Palestinians.

Qureia said the legislature will not rubber stamp decisions by the PLO. "They (legislators) will not say yes to (just) anything," he said.

The legislature has challenged Arafat in the past, refusing last year to approve what it considered to be an insufficient Cabinet reshuffle. But days later, lawmakers pulled back from an open rebellion and approved the new Cabinet with slight changes.

The speaker said a majority of two-thirds of the 88 legislators is required to amend the Basic Law and create the position of prime minister. The process could be completed within days, Qureia said.

Arafat then has a month to review the change in the law, but cannot override it. As a next step, Arafat would appoint a prime minister who -- possibly after naming a new Cabinet -- would have to seek parliament's approval.