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Middle East: Factbox -- Challenges Facing Palestinian Election Winner

Palestinian Authority President-elect Mahmud Abbas (file photo) 10 January 2005 -- Moderate Palestinian leader Mahmud Abbas's landslide victory in a presidential election to succeed Yasser Arafat has raised hopes of a revival of Middle East peacemaking. Below are some of the challenges Abbas will face in the pursuit of peace, statehood, internal reforms and improving the Palestinian economy:


Ending violence will be key to negotiations with Israel, but Islamic militants bent on wiping out the Jewish state have rejected calls from Abbas for an end to armed struggle. Even fighters from his Fatah movement appear lukewarm.

Co-opting militants is the option favored by Abbas. But if that fails, a Palestinian president would have little choice but to use force or abandon hope of peace progress. A halt to attacks that Abbas brokered in 2003 collapsed in weeks.

The task will be much more difficult if Israel keeps up raids into the West Bank and Gaza, but that is itself partly dependent on whether attacks continue in the Middle East's cycle of bloodshed.

Talks With Israel

Both Israel and the Palestinians will be under diplomatic pressure for a high-profile summit after the election.

Israeli Prime Minister Ariel Sharon has voiced a willingness to meet Abbas -- they last held talks in 2003 -- and has held out the prospect of coordinating his plan for withdrawing settlers from the Gaza Strip. But Palestinians still fear it is a ruse to keep a stronger Israeli hold on the West Bank.

Abbas has insisted coordination on Gaza depends on whether it is a clear step toward broader negotiations for statehood.

He could face the risk of being discredited if he goes along and Israel merely pays lip service.

Israel insists there can be no talks on statehood unless attacks end, especially mortar bomb and rocket strikes on Jewish settlements in the Gaza Strip and towns in southern Israel.

Internal Reform

There are strong demands at home and from abroad to reform and revive a Palestinian Authority laid waste not only by the past four years of conflict but also by mismanagement, corruption and cronyism.

The Palestinian president will need to challenge an old guard of officials, Fatah movement leaders and security bosses who have prospered in power and are under pressure from a younger generation that sees them as out of touch.

Key steps to watch for will be cabinet appointments and changes to slim down the plethora of security forces.

The danger of failing to address reform would be a resumption of the unrest that seized Gaza and parts of the West Bank in the months leading up to Arafat's death on 11 November

Economic Crisis

Between 1999 and 2003, annual Palestinian per capita income is estimated to have dropped by about one-third to a little over $1,100. In the same period, unemployment rates rose from 10 percent to 26 percent, according to the World Bank.

An extra $500 million a year from donors is possibly on the table for the Palestinian Authority, on top of current funding of about $900 million a year, but this depends on ending violence and internal reform.

One of the most important measures would be if Israel relaxes restrictions on movement of people and goods, both into the Jewish state and between parts of the West Bank and Gaza Strip.

But Israel says that cannot happen if it thinks such moves could also encourage suicide bombings.