JERUSALEM -- The internationally respected prime minister of the Palestinian Authority, Salam Fayyad, resigned on Saturday, raising concerns about political stability in the West Bank days after Secretary of State John Kerry proposed a broad initiative to aid the Palestinian economy there to shore up peace efforts.
The president of the Western-backed authority, Mahmoud Abbas, accepted Mr. Fayyad's resignation but asked him to stay until a new government could be formed, according to Palestinian officials, signaling an effort to minimize the upheaval.
But the timing of the resignation, which had been brewing for weeks over Mr. Fayyad's differences with Mr. Abbas and his Fatah party, seemed to deliver a blow to American prestige at the very least. The possibility of heading off the prime minister's resignation was among the topics that President Obama discussed with both Mr. Fayyad and Mr. Abbas when he visited Ramallah, West Bank, last month, and it was also a focus of Mr. Kerry's meeting with Mr. Abbas last week.
Since Mr. Kerry left the region, he has had more than one telephone conversation with both men to try to prevent the resignation. Israeli officials have also been quietly urging Mr. Fayyad to stay, aware that their public support is likely to backfire.
"The U.S. has worked very hard," one Western diplomatic official said, speaking on the condition of anonymity. "Kerry asked him to stay. There's been a lot of messaging from the Western community about how much we value Fayyad's work."
Underlying tensions between Mr. Fayyad and Mr. Abbas burst out in early March when the finance minister, Nabil Qassis, announced that he was quitting. Mr. Fayyad accepted the minister's resignation against the wishes of Mr. Abbas.
Palestinian insiders said that Mr. Fayyad, a political independent, submitted a letter to the president on March 23 laying out his intention to resign. In the meantime Mr. Fayyad helped pass a new annual budget, spent a few days in a hospital after suffering stomach pains and kept things on course during the visits of Mr. Obama and Mr. Kerry. Mr. Obama told an Israeli audience in Jerusalem that the Israelis had "true partners" in Mr. Abbas and Mr. Fayyad. The resignation was sealed in a brief meeting with Mr. Abbas on Saturday evening, two days after Mr. Abbas returned from a trip abroad.
Mr. Fayyad, an American-educated economist, had gained the confidence of the West and of many Israelis, building up the credibility of the Palestinian Authority by introducing transparency, accountability and stability. Since being appointed to the premiership in 2007, he has championed law and order in the West Bank after years of chaos and focused on building the institutions of a future state.
But he has struggled to build a popular constituency on his home turf and became a target for senior Fatah figures resentful of his power, and who blamed him for all the authority's problems. People who spoke with Mr. Fayyad on Saturday and throughout the past week said he had grown increasingly frustrated over attacks on his leadership by Fatah officials, and over Mr. Abbas's failure to either defend him publicly or move behind the scenes to quell the criticism.
This month, the Fatah Revolutionary Council, the party's Parliament, criticized Mr. Fayyad's policies with unusual bluntness, describing them as "improvised and confused." Mr. Fayyad has also borne the brunt of popular anger in recent months over rising prices and economic hardship in the West Bank.
The Palestinian Authority has been mired in financial crisis for two years, in part because of a shortfall in donations and Israel's withholding of tax revenues in response to Mr. Abbas's bid for enhanced status for the Palestinians at the United Nations. The authority has frequently been unable to pay its tens of thousands of employees in full and on time over the past year.
"Fatah has been critical of Fayyad for the last five years because he came to put things in order," said Mahdi Abdul Hadi, director of the Palestinian Academic Society for the Study of International Affairs, an independent institute in East Jerusalem, noting that Fatah has over the years been notoriously divided and corrupt.
"Fayyad claims his mission was accomplished," Mr. Abdul Hadi said. "Some Americans talk of 'Fayyadism' as a school of thought." Now, Mr. Abdul Hadi said, "the Americans will deal with whoever is his successor in office."
"This is realpolitik," he said.
Ghassan Khatib, vice president of Birzeit University in the West Bank and a former Palestinian Authority spokesman, said he sensed feelings of anxiety among the public.
Mr. Fayyad, he said, was associated with moving the authority "from a state of lawlessness to order and due process and from a chaotic financial situation, corruption and a poor image to a situation of proper financial management."
He said the confidence of foreign donors would now depend on whom Mr. Abbas assigned to replace Mr. Fayyad.
Some Western officials suggested that Mr. Fayyad might stay a month or more as a caretaker, easing immediate donor concerns, but also suggested that the Palestinian Authority's future did not depend on Mr. Fayyad.
"Yes Fayyad is important," said the diplomatic official, "but I think the P.A. must go on, and it'll be interesting to see who comes next."
"We've been reiterating the message that we value his work enormously," he said of Mr. Fayyad, "but we also know that the bigger picture remains the P.A., and the game will be to work with the P.A. to build a credible institution, Fayyad or no Fayyad."
In Washington, Caitlin Hayden, a spokeswoman for the National Security Council, said: "Prime Minister Fayyad has been a strong partner to the international community and a leader in promoting economic growth, state-building and security for the Palestinian people. We look to all Palestinian leaders to support these efforts."
One name that has been mentioned as a possible successor is Mohammad Mustafa, the chairman and chief executive of the Palestine Investment Fund and also a respected economist. He is seen by Western officials as part of the old-style Arab politics and by Palestinians as a technocrat with little political stature.
Members of Fatah have also floated the candidacy of Muhammad Shtayyeh, a senior Fatah official and an adviser to Mr. Abbas. But they added that Mr. Abbas was not likely to appoint a replacement before exploring new possibilities of reconciliation with his rivals in Hamas, the Islamic militant group that controls Gaza -- a situation that could further complicate peace efforts.
In a previous unity deal reached over a year ago, Mr. Abbas agreed to lead an interim government of political independents and technocrats to pave the way for elections in the West Bank and Gaza.
Mr. Abbas appointed Mr. Fayyad prime minister of the government formed after the split with Hamas. The Islamic group, Hamas, won Palestinian parliamentary elections in 2006 and a year later seized control of Gaza after a factional war there. Hamas routed Fatah from Gaza, confining Mr. Abbas and his authority to parts of the West Bank.
Khaled Abu Aker contributed reporting from Jerusalem, and Jackie Calmes from Washington.
This article originally appeared in The New York Times.