RAMALLAH, West Bank -- After days of bitter quarreling with Yasser Arafat, interim Palestinian Prime Minister Ahmed Qureia said Sunday he intends to give up his post in the coming weeks, dampening hopes of reviving a stalled U.S.-backed peace plan.

Still, Qureia's threat left open the possibility a deal could be worked out to keep him in office.

Meanwhile, the Israeli army said it withdrew some troops from the Rafah refugee camp in Gaza, where it fought Palestinians for two days while searching for weapons-smuggling tunnels. Eight Palestinians were killed, and local residents reported the army destroyed 100 homes.

Arafat and Qureia disagree over the amount of control the Palestinian leader will retain over Palestinian armed forces, as well as procedural and personal issues.

Israel and the United States insist Arafat hand over authority, charging he is tainted by terrorism. Palestinians deny that and say Arafat is their elected president -- although the term he won in 1996 has expired.

Qureia currently heads an emergency Cabinet that Arafat appointed by decree a week ago. When that Cabinet's term expires in three weeks, Qureia was set to form a more permanent government subject to approval by Palestinian legislators.

Three weeks

But Qureia said after Sunday's meeting of the central committee of Arafat's ruling Fatah party that a new government will be formed in about three weeks "with a new prime minister, too."

Some observers viewed that statement as one of frustration. If Qureia quits, he would be the second prime minister in five weeks to resign over disputes with Arafat, casting doubt on whether Arafat will ever relinquish enough power to allow a premier to succeed.

The new office of prime minister was created by the Palestinian Authority earlier this year under pressure from the United States and Israel -- who sought to marginalize Arafat and create a new, more acceptable negotiating partner for Israel.

The United States hoped the prime minister would implement the "road map" peace plan, which envisions an end to Israeli-Palestinian violence and the creation of a Palestinian state by 2005.

But the first man Arafat appointed premier, Mahmoud Abbas, lasted only four months in office, resigning Sept. 6 after being caught between Israeli demands for a crackdown on militants and Arafat's refusal to give up control over security forces.

Qureia, named Abbas' successor the following day, has been arguing with Arafat for days over who would be security chief in the new Cabinet and whether Arafat even had the authority to name an emergency Cabinet without legislative approval. Qureia threatened to resign last week, just days after officially taking office.

Under an agreement worked out Sunday by top Fatah officials, Qureia and the six emergency Cabinet ministers sworn in last week would remain in place for another three weeks without a security chief, Palestinian Foreign Minister Nabil Shaath said. The legislators would not have to approve them.

Then, Qureia and the Cabinet would resign and a new government would be presented to the legislature for approval, a senior Palestinian official said.

During Sunday's Fatah meeting, Qureia told officials he did not intend to remain prime minister when the emergency government's term expires.

The argument between Arafat and Qureia centered on Arafat's appointment of Nasser Yousef as interior minister, making him head of the security forces.

An independent-minded interior minister is considered crucial to efforts to salvage the road map.

, which calls for the dismantling of violent Palestinian groups -- even through Qureia has said he will not use force against militants.

Arafat, who named Yousef interior minister in the emergency Cabinet, withdrew his support for his longtime ally after Yousef refused to participate in Tuesday's Cabinet inauguration, Palestinian sources said.

Yousef said he wanted to wait until the government had parliamentary backing. Some saw that as a brazen slight to Arafat, who presided over the ceremony, and a signal of independence to U.S. officials hoping to marginalize Arafat.

Qureia said dumping Yousef now, just a week after he was named, would embarrass the government.

Meanwhile, Israeli soldiers continued a three-day operation in the Rafah refugee camp on the Gaza-Egypt border. They are searching for tunnels used to smuggle weapons and drugs into Gaza underneath the border with Egypt, the military said, adding that three tunnels were destroyed.

Military officials said Palestinians planned to use the tunnels to bring in more advanced weapons, like anti-aircraft missiles, that could have a strategic impact on the three-year conflict.

Local Palestinian officials said the army destroyed a significant part of the Yabena neighborhood, including its water and sewage treatment facilities.

The army said that in such prolonged fighting, significant damage was bound to occur.

The raid was part of increased military activity after last weekend's suicide bombing that killed 20 Israelis in a restaurant in the port city of Haifa.