RAMALLAH, West Bank - The Palestinian cabinet resigned on Monday in an apparent attempt by President Mahmoud Abbas to demonstrate political reform in the wake of the popular uprising in Egypt.

The shake-up could bolster the standing of President Mahmoud Abbas among Palestinians dissatisfied with the workings of a cabinet regarded by many as dysfunctional.

The reshuffle had been demanded by Prime Minister Salam Fayyad, who has spearheaded efforts to create institutions for a Palestinian state. Fayyad will retain his post and select new ministers, officials said.

"The cabinet resigned today and the formation of a new cabinet will take place as soon as possible," Ali Jarbawi, minister of planning, told Reuters.

Financed by international donors and engaged in security coordination with Israel, the Palestinian Authority has a limited mandate in the occupied West Bank. It lost control of the Gaza Strip to Hamas Islamists in a 2007 civil war.

Abbas's credibility has been further sapped by stalled talks with Israel on a deal to establish a Palestinian state.

Hamas, which rejects permanent co-existence with Israel, said in response to the reshuffle it was motivated by Abbas's fears that Palestinians would follow the lead of Egyptians in demonstrating for political change.

"Unless Mahmoud Abbas carries out serious security and political reforms, his authority will be subject to the wrath of the Palestinian people," Hamas spokesman Sami Abu Zuhri said in the Gaza Strip.

Although several anti-Abbas protests erupted in the West Bank after the upheaval began in Egypt on Jan 25, he has not faced large-scale demonstrations in the territory, whose economy has strengthened in recent years.

Reuters