RAMALLAH ø Palestinian Authority Finance Minister Salam Fayyad has become the go-to man for insurgents in the ruling Fatah movement.

Palestinian sources said insurgents from the Fatah-dominated Al Aqsa Martyrs Brigade have met Fayyad and appealed for funds from the PA. The sources said the Fatah fighters were registered on the payroll of PA security services but rarely reported to work.

"At first these people went to President [Yasser] Arafat," a senior PA official said. "The president said he didn't have any money and that the issue could only be dealt with by Fayyad."

[On Tuesday, Israeli forces launched major operations in the West Bank city of Nablus and the Gaza Strip. An Israeli officer and four Palestinians ø two of them U.S. citizens ø were killed in a helicopter missile strike in Nablus. Israeli military sources said the U.S. citizens were bystanders, Middle East Newsline reported.]

Palestinian sources said Fayyad has become the last word for funding in both the PA as well as in the ruling Fatah movement. Fayyad's stature has been endorsed by the European and the United States, which see the U.S.-trained finance minister as a model for transparency and government accountability.

The crisis that resulted in the appeal by Fatah insurgents to Fayyad began in May. Starting last month, Fayyad was given authority for the salaries of more than 40,000 members of the PA security forces. The Finance Ministry began paying salaries directly into the bank accounts of PA police and security forces.

Fayyad's authority was opposed by Arafat as well as security commanders, who until May distributed salaries to their troops. The sources said the security commanders had benefited greatly by inflating manpower levels and pocketing the difference.

The sources said that over the last month hundreds of Fatah insurgents who had received a PA salary through fictitious service in the police and security forces were thrown off the government payroll. When Fatah insurgents urged Arafat to pay the salaries, the PA chairman said he did not have the money, the sources said.

Western donors and Japan provide most of the $1.2 billion in the PA budget. In April, Arafat accepted the Western demand that Fayyad control all PA funding after donors threatened to halt the transfer of funds that would ensure the payment of monthly salaries to PA employees.

Since then the stream of supplicants who sought aid from Arafat has been diverted to Fayyad. Palestinian sources said Fayyad controls 70 percent of all funds through the PA. Arafat was said to control the rest.

The United States has been heavily monitoring the activities of Fayyad and the Finance Ministry. The sources said the U.S. government has sent advisers and established a presence in the Finance Ministry in Ramallah.

So far, the sources said, Fayyad has failed to control PA funds in the Gaza Strip. They said Arafat remains in control over large parts of the PA infrastructure in the Gaza Strip.

Arafat has been under pressure by Egypt to cede most of his authority to Prime Minister Ahmed Qurei over the next few weeks. Palestinian sources said Arafat pledged to respond to the Egyptian request during the next visit by Egyptian intelligence chief Gen. Omar Suleiman, scheduled to arrive in Ramallah at the end of June.

Egypt has demanded that Arafat appoint an interior minister and merge the 12 Palestinian security agencies into three organizations. The new structure would comprise a Palestinian police force, domestic security agency and military intelligence.