THE Middle East peace process was plunged into crisis yesterday when Mahmoud Abbas, the Palestinian prime minister, resigned after four turbulent months in office.

His sudden departure coincided with an Israeli attack on leaders of the Islamic militant group Hamas, which responded by threatening to assassinate Ariel Sharon, the Israeli prime minister.

Sheikh Ahmed Yassin, the group’s wheelchair-bound spiritual leader, was injured on one hand when a warplane bombed a third-floor flat he had just left in Gaza City.

Last night European Union foreign ministers called for urgent diplomatic action to save the so-called “road map” to Middle East peace. The ministers also formally designated the political wing of Hamas a terrorist organisation after the bombing of a bus in which 22 Israelis died last month.

It was not immediately clear whether Yasser Arafat, the president of the Palestinian Authority, would accept Abbas’s resignation. But the prime minister’s decision to quit was a setback for Tony Blair, who has encouraged American-led attempts to end the three-year-old intifada against the Israelis and prepare the way for an independent Palestinian state.

The resignation appeared to have been provoked by a vicious power struggle between Arafat and Abbas for control of Palestinian security forces.

Appointed last April after America and Israel refused to deal any further with Arafat, Abbas had struggled ever since to impose his authority. He was denounced as a CIA agent last week by militants loyal to Arafat, who pounded on the doors of the Palestinian parliament.

Palestinian and Whitehall sources said the dispute between the two men might yet be settled by a compromise involving a transfer of some powers that would strengthen Abbas. Failure to secure his return would be a personal blow to President George Bush.

At an EU meeting in Riva del Garda, Italy, Jack Straw, the foreign secretary, described the situation as “grave”.

He added: “It doesn’t put the peace process back to square one, but it is a further difficulty, a huge tragedy, that the Palestinians should be so divided.”

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