The radical Popular Front for the Liberation of Palestine says it is temporarily withdrawing from the executive committee of the Palestine Liberation Organization because of the arrest of its leader.
Officials from the Popular Front for the Liberation of Palestine (PFLP) say they are suspending participation in the PLO's executive committee until the group's leader, Ahmed Saadat, is released from jail.
The PFLP is the second-largest organization within the PLO and the executive committee, which is headed by Chairman Yasser Arafat, runs the organization's day-to-day business.
Israel had demanded that the Palestinian Authority arrest Mr. Saadat in connection with the assassination of an Israeli Cabinet minister last October.
The PFLP claimed responsibility for killing Israeli Tourism Minister Rehavam Ze'evi, saying the move was in retaliation for Israel's assassination of its former leader, Abu Ali Mustapha, earlier in the year.
Tensions have mounted between the Palestinian Authority and the PFLP.
The Damascus-based group has threatened the lives of Palestinian security chiefs because of Mr. Saadat's arrest last month.
The PFLP gained international attention in the 1970s for carrying out a series of airline hijackings and other guerrilla attacks.
The withdrawal of the PFLP increases internal pressure on Mr. Arafat, who is facing international demands to crack down on militant groups and end 16 months of violence.
The detention of Mr. Saadat is one of the conditions imposed by Israel to allow Mr. Arafat to leave his headquarters in the West Bank city of Ramallah, where he has been confined by an Israeli army blockade since early December.
Earlier Saturday, Israeli combat helicopters fired missiles at a Palestinian naval base in Gaza.
There were no reports of casualties in the assault, which the army says was in retaliation for a Palestinian mortar attack and an exchange of gunfire in the area.
The violence followed reports that Israeli Prime Minister Ariel Sharon met secretly earlier this week with three top Palestinian officials. It was the first such meeting since the Israeli leader was elected last year.
Sources say Palestinians demanded that Israel stop killing militants, end its closure of the territories, allow Mr. Arafat to leave Ramallah and stop military raids into Palestinian-controlled areas.
The sources say Mr. Sharon replied that he would only relax restrictions if Palestinians end attacks on Israelis and incitement against the Jewish state.