Palestinian leader Yasser Arafat officially asked his moderate PLO deputy Mahmud Abbas to become prime minister a day after parliament approved the creation of the post, a top Arafat aide confirmed.Nabil Abu Rudeina told reporters Wednesday that presidential secretary Tayeb Abdelrahim had asked Abbas on the veteran leader's behalf to take the job of prime minister sharing power with the head of the Palestinian Authority.

"Arafat called Abu Mazen today to officially ask him to begin his duty as prime minister," Abu Rudeina said, using Abbas's nom de guerre.

He did not comment on Abbas's response.

Information minister Yasser Abed Rabbo told AFP that Arafat had asked Abbas to form a new government.

Under the new law passed Tuesday, Abbas has three weeks to form a government and present it to parliament. If he fails to do that, he would have another two weeks before Arafat is obliged to nominate another premier.

Arafat conceded defeat Tuesday when parliament rejected an amendment to a bill proposing that the veteran leader retain the power to hire or fire ministers. He then signed the bill into law.

The move is a key reform demanded by Israel and the United States, as well as by Palestinian legislators who accuse the current administration of corruption and mismanagement.

Abbas, the second-in-command of the Palestine Liberation Organisation (PLO), has not said whether the powers attached to the post will be enough to lure him into accepting the job, which he wants to use to launch substantive reforms.

But after being nominated by Arafat, his Fatah party and a central PLO body, officials said he was unlikely to refuse.

The approval of the bill unchanged on Tuesday was welcomed as a breakthrough by reformers, including those inside Arafat's own Fatah faction.

"This is the start of a new political democratic system that will allow the separation of powers," said Fatah MP Qaddura Fares.

Arafat loyalists played down the snub to their leader, as Washington and London praised the move towards appointing a premier, seen as essential to overhauling the much-criticised administration and marginalising Arafat, whom Israel and the United States regard as a failed peace partner.

In a bid to boost the cause of reform, US Secretary of State Colin Powell on Sunday said he would invite the new premier to Washington for talks, by far the most generous offer made by the US administration in months.

The appointment of Abbas will put pressure on Israeli Prime Minister Ariel Sharon to make concessions after lauding the PLO moderate and holding secret talks with him.

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Arafat officially asks Abbas to take new PM's job