UNITED NATIONS, July 19 (AFP) - UN Secretary General Kofi Annan said Monday the situation in the Gaza Strip had borne out his Mideast envoy's criticism of the Palestinian leadership, which drew an angry reaction from the Palestinians.
Violent clashes erupted at the weekend in Gaza in an unprecedented challenge to leader Yasser Arafat, with radicals furious after he appointed his nephew to a key security post.
UN envoy Terje Roed-Larsen told the Security Council last week that Arafat had not shown the political will to reform his Palestinian Authority (PA) government and that the PA was on the verge of collapse.
"He was stating the facts and I think events have borne him out," Annan told reporters at UN headquarters in New York.
"It is a serious crisis with the prime minister at the centre of it," Annan said.
"Chairman Arafat should really take the time to listen to the prime minister and other members of his leadership, and take the necessary steps to bring the situation under control," he said.
Palestinian prime minister Ahmed Qorei resigned over the weekend as Arafat faced the most serious challenge to his position since returning from exile around a decade ago.
Eighteen people were injured overnight Sunday in the southern Gaza town of Rafah during the clashes between the security services and fighters from the Al-Aqsa Martyrs Brigades.
The group had denounced nephew Musa Arafat's appointment as head of Palestinian military intelligence, which they said was another sign of corruption in Arafat's leadership.
Musa was quickly demoted to control over only Gaza but the Brigades, an armed wing of Arafat's Fatah faction, said the subsequent reshuffle was just "another attempt to fool people."
A top Arafat aide last week said that Roed-Larsen, the UN envoy, would be banned from Palestinian territories after his unusually strong criticism, but the Palestinians backed down from those comments.
Gaza MP and former cabinet minister Ziad Abu Amer said that Arafat still appeared to believe that he was untouchable.
"Yasser Arafat is not concerned with issues of popularity or reforms, he cares about control and political survival," Abu Amer told AFP.
"It is not the first time Arafat has taken decisions or make appointments that are unpopular among his people, but he believes and Palestinians have him believe that he is the only legitimate leader, the symbol of the Palestinian struggle."
The international community expressed its concern over the crisis, with EU foreign policy chief Javier Solana calling for calm.
The White House said the situation underlined the need to have a "Palestinian leadership in place that is committed to establishing the institutions necessary for a democratic state to emerge."