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Abbas and his Fatah party had long wrangled with Fayyad, an independent, over his handling of the moribund economy. The deficit and public debt have deepened amid World Bank predictions that growth rates of 11 percent in 2010-11 would fall by half in 2013.

A poll this month put Fayyad's approval rating at just 25 percent, compared with 49 percent for Abbas and 40 percent for Ismail Haniyeh, the Islamist Hamas party's prime minister in the Gaza Strip.

Despite Fayyad's reputation for clean dealing in the West, 78 percent of West Bank residents perceived Palestinian Authority institutions to be corrupt, according the same survey by the Palestinian Center for Policy and Survey Research.

"Thank God he's finally gone," said Khaled Ashraf, a restaurateur in Ramallah. "Sure there was some growth, but it's all done now, and just like usual the people aren't better off."

Some Palestinian officials credited Fayyad with progress, but said he faced long odds of reviving an economy under Israeli occupation and dwindling aid flows.

The Hamas government in Gaza, which split from Fatah in a bloody 2007 war, despised Fayyad, whom it regarded as complicit in Israel's blockade on the coastal enclave and a usurper of Hamas's claim to the