Citing Israel's reoccupation of West Bank cities and crippling military restrictions, the Palestinian leadership announced yesterday that elections scheduled for January 20th were being postponed.
In weekend fighting, Israeli troops killed a 12-year-old Palestinian girl.
The decision by the Palestinian cabinet did not come as a surprise, following a recommendation by its election commission to delay polling in parliamentary and presidential elections until after Israel withdraws from West Bank towns. Essentially, the move means the elections have been postponed indefinitely.
"Due to the Israeli reoccupation, obstruction and closures, it is impossible to convene the election on January 20th," a minister, Mr Saeb Erekat, said after the cabinet meeting yesterday.
"It has become clear to all of us that to hold the elections while all Palestinian cities are under occupation is clearly impossible," added Information Minister, Mr Yasser Abed Rabbo.
Palestinian Authority President, Mr Yasser Arafat, called general elections three months ago in an attempt to assuage the US, which has been exerting pressure on the Palestinians to reform their political system as part of a process that is meant to lead to the creation of an independent Palestinian state.
But the move was also seen by some as an effort by Mr Arafat, who has been declared "irrelevant" by the Israelis and ostracised by the Americans, to boost his flagging status, since he is expected to be re-elected by a clear majority.
The US, which has been hoping to sideline Mr Arafat as part of the reform process, has favoured parliamentary elections, but was less enthusiastic about a presidential poll, fearing it would see the Palestinian leader reinstated with a strong mandate.
The only time Palestinians have gone to the polls since they won self-rule in parts of Gaza and the West Bank was in 1996. In recent months, however, Mr Arafat has come under internal criticism as well, especially over what many Palestinian view as a corruption-ridden cabinet. To mollify his critics, the Palestinian leader twice reshuffled his cabinet.
The Prime Minister, Mr Ariel Sharon, announced yesterday that Israeli security forces had arrested a Palestinian on suspicion of working as an agent in the Gaza Strip for the Lebanese-based Hizbullah. Israel named the man as Ahmed Awiti and said he was a flight mechanic who worked at the Gaza airport.
The statement released by Mr Sharon's office said Mr Awiti had helped to train members of the militant Hamas group and improve an anti-tank rocket used by the organisation.
Palestinian officials at the airport said they had never heard of Mr Awiti.
The Palestinian girl was killed on Saturday in the Gaza town of Rafah during a gun fight between Israeli troops and local militants. Palestinian sources said Hanin Abu-Samah died after she was hit in her home by Israeli fire.
Later on Saturday night, Israeli troops shot dead a man they said was trying to infiltrate the Jewish settlement of Morag in the strip.
Troops yesterday demolished the Gaza home of Islamic Jihad militant Ziad Abed Elal, who Israel accuses of being one of the planners of an attack on Friday in which Yitzhak Arameh, a rabbi and 40-year-old father of six children from a Jewish settlement, was killed.