Mr. Qureia emerged with Mr. Arafat from the meeting in a display of unity.
Standing outside Mr. Arafat's headquarters in the West Bank city of Ramallah, the two men kissed on the cheeks before raising their clasped hands in the air.
Mr. Qureia says he withdrew the resignation he offered 10-days ago and promised steps toward reform and upholding the rule of law in the Palestinian areas.
For the past two weeks in the Gaza Strip, armed Palestinians have demanded changes in the command of the security forces and an end to corruption within Mr. Arafat's administration.
Palestinian officials said Mr. Qureia has won a greater say in running the Palestinian Authority and that Mr. Arafat will announce details of the deal soon.
Mr. Arafat has made similar pledges in the past, but then failed to carry them out.
Mr. Qureia's predecessor, Mahmoud Abbas, resigned last year after losing a power struggle with Mr. Arafat to gain control of the security forces.
Mr. Arafat's dominance over the Palestinian Authority is regarded by Israel and the United States as a major obstacle to reviving peace talks. Israel and the United States have cut off direct contacts with Mr. Arafat and called for him to step aside and allow a new Palestinian leadership to take the reins of power.
Mr. Arafat remains isolated in his Ramallah compound and refuses to leave the area for fear that Israel will never allow him to return to the West Bank.