The White House urged the Palestinians Tuesday to "move forward" with political reforms, even as hopes faded that their reformist prime minister-designate, Mahud Abbas, would create a cabinet.

"It's important for the future of the Palestinian people that reforms move forward," spokesman Ari Fleischer said after Abbas said he would no longer discuss the formation of a new government with Yasser Arafat.

Abbas has until midnight (2100 GMT) Wednesday to name a new cabinet or step aside, jeopardizing the chances for an international peace plan, or "roadmap," which US President George W. Bush has said he will release when the moderate new leader has revealed his lineup.

The US leader "is continuing to keep an eye on the situation and (has) high hopes that an agreement will be reached and that reforms can move forward," said Fleischer.

If Abbas does name a cabinet, Bush is poised to release the roadmap "soon thereafter," said the spokesman, who refused to give a specific timeline.

"It's important to move forward, and part of moving forward is the confirmation of the cabinet," said Fleischer.

Abbas walked out of talks with Arafat late Saturday, threatening to quit over the stalemate.

Frantic last-minute discussions to find a way out of the impasse were underway Tuesday in Fatah, the faction the two men founded together more than 40 years ago.

"Things have broken down between me and Arafat. I will not come back," Abbas was quoted as saying by one mediator close to efforts to jump-start the negotiations.

The international community has pinned its hopes of overhauling the Palestinian leadership and renewing the peace process on Abbas, also known as Abu Mazen. Israel and the United States accuse Arafat of fueling violence and want him replaced.

In a last-ditch effort to save the talks, parliamentary speaker Ahmed Qorei was sent to meet Abbas, to try to persuade him to come back.

But one parliamentarian told AFP that the chances of bridging the gap between the two men were "very, very weak." Abbas stormed out of talks Saturday over Arafat's refusal to accept his nomination of Mohammed Dahlan -- one of the few men believed to be willing and able to take on Palestinian armed groups -- as his security chief.

Arafat was said to want to retain control of the key security forces for himself.

But insiders said the issue was even broader, with Arafat fearing he will be totally eclipsed by Abbas, who has already been invited to visit Washington once he is in office.

Arafat, once a frequent White House visitor of former president Bill Clinton, has not been invited back since Bush came to power - Sapa-AFP