Palestinian Prime Minister Mahmoud Abbas, weakened by a power struggle with Yasser Arafat, submitted his resignation Saturday -- a move that dealt a serious blow to a US-backed peace plan. Palestinian leader Yasser Arafat accepted the resignation soon afterward, Palestinian official said. Within minutes of the announcement, the European Union expressed deep concern at the "serious risk of dangerous instability" at the head of the Palestinian leadership. Meanwhile, a senior Israeli official said that Abbas remained Israel's sole Palestinian contact on the peace process.

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