Political unrest and violence against the authority of Palestinian President Yasser Arafat continues to sweep through the Gaza Strip. A group of armed Palestinians in the southern Gaza Strip destroyed a police station, following mass demonstrations in the territory against the nomination of Mr. Arafat's relative, Mousa Arafat, as the new head of the Palestinian security forces.

Palestinian gunmen stormed an office of Mr. Arafat's Palestinian intelligence service, opening fire on security guards, smashing furniture and burning down the one-story building.

The attack in the southern Gaza city of Khan Younis was in protest at the appointment of a member of Mr. Arafat's family as chief of the Palestinian security forces.

The incident followed mass demonstrations Saturday in Gaza City and a series of kidnappings Friday challenging Mr. Arafat's rule.

In an attempt to calm the situation, the embattled Palestinian President met with Prime Minister Ahmed Qureia, who offered his resignation over the violence in Gaza.

Palestinian Minister for Negotiations Saeb Erekat says Mr. Arafat has rejected the resignation, and has urged Mr. Qureia to stay on in his current post.

"We have a crisis. Abu Ala [Mr. Qureia] has informed us that he has submitted his resignation to Mr. Arafat. Deliberations are going on at all levels, and I hope we can exert every possible effort in order to deal with the problems facing our society," said Mr. Erekat. "We have witnessed a grave deterioration in Gaza Strip, lawlessness. And we hope that the rule of law will be maintained through a series of comprehensive steps taken by the Palestinian Authority."

The events in the Gaza Strip are also being observed in Israel with great interest.

Israel's justice minister, Yosef Lapid, blames Mr. Arafat for the turmoil.

"The resignation of Abu Ala [Mr. Qureia] is only a symptom of the disastrous situation in the Palestinian territories, caused by Arafat," he said. "It is solely his fault. If he was not around, we could talk to Abu Ala and reach some arrangement that would be acceptable both to the Palestinians and the Israelis. As long as Arafat is there to disturb peace, and to prevent any sort of solution in this area, this will happen time and again."

Observers believe that Mr. Arafat will survive the current crisis, but acknowledge his authority is increasingly under challenge.

The international community has long been demanding that he give up control of the security forces. Observers say his decision to announce some changes on Saturday do not signify real reform.

The security forces remain under the control of the Palestinian National Security Council, which is headed by Mr. Arafat.

Members of Mr. Arafat's Fatah faction, who are behind the current violence, also point out that the president's decision to appoint a relative to head the security forces further reinforces the public's opinion that the Palestinian Authority is riddled with corruption and political cronyism.