OCCUPIED JERUSALEM, 30 October — The Palestinian Parliament yesterday approved Yasser Arafat’s new Cabinet. Arafat’s old foe, Israeli Prime Minister Ariel Sharon, faced a battle to save his coalition government in Parliament today.

Legislators voted 56 to 18 to ratify the Palestinian president’s ministerial roster in what was at times a stormy session at which critics accused Arafat of failing to make any real changes to a government they view as tainted by corruption.

It was a new Cabinet Arafat had pledged would overhaul his Palestinian Authority but which was packed mostly with old faces.

But the vote in the Palestinian Legislative Council marked a victory for Arafat after his warning that a "no" would cause a collapse of the Palestinian Authority and with it hopes for statehood.

There are five new faces in the Cabinet, which has been reduced from 21 to 19 members. In a move likely to raise eyebrows in Washington, Arafat replaced his interior minister, Abdel-Razzak Al-Yahya, regarded as a US favorite. Yahya had been in charge of reforming security services. Yahya was replaced by Hani Al-Hassan, a Fatah member.

"I do not think it is a reform government or a qualitative shift in performance," reformist legislator Hanan Ashrawi said. Arafat reacted fiercely when legislator Abdel Jawad Salah, an independent, accused his Palestinian Authority of corruption.

"I will not allow you to humiliate us," Arafat snapped.

The new Cabinet will serve until presidential and legislative elections on Jan. 20.

An Israeli government spokeswoman expressed cautious hope for a "good security performance" from the new leadership.

Sending a mixed message to Israel from his headquarters in Ramallah, Arafat said he was extending an "olive branch" of peace. But he also accused the Israeli government of using the issue of reform to try to topple his Palestinian Authority.

Arafat’s address coincided with a political battle in Israel that has brought Sharon’s broad-based coalition close to collapse in a dispute with his main partner, the center-left Labour Party.

Labour, led by Defense Minister Binyamin Ben-Eliezer, plans to defy the right-wing Sharon and oppose the 2003 state budget in the Knesset (Parliament) today over funds allocated to Jewish settlements in occupied territories. Labour has demanded some of the funds earmarked for settlements be reallocated to the poor and the elderly.

Sharon, riding high in opinion polls, vowed to eject Labour from his 19-month-old coalition if it voted against the budget, a move that would leave him without a parliamentary majority and possibly lead him to declare new elections for January. The loss of Labour’s 25 seats in the 120-member Parliament would leave Sharon in control of only 55 votes.

Sharon accused Ben-Eliezer of flip-flopping on his original support for the budget and using the settlement issue to try to beat back a challenge from dovish candidates in Labour leadership elections due on Nov. 19.