RAMALLAH, West Bank -- Palestinian Prime Minister Salaam Fayyad resigned on Saturday, leaving the Palestinians without one of their most moderate and well-respected voices just as the U.S. is launching a new push for Mideast peace.

A statement from the official Palestinian news agency Wafa said President Mahmoud Abbas met with Fayyad late in the day and accepted his resignation, thanking him for his service. According to the statement, Abbas asked Fayyad to continue to serve in his post until Abbas forms a new government.

Abbas was expected to name a new prime minister within days, according to Palestinian officials, who spoke on condition of anonymity in line with regulations.

Abbas and Fayyad had been locked in an increasingly bitter dispute over the extent of the prime minister's authority. Fayyad offered his resignation on Thursday, but Abbas did not respond to Fayyad's offer until Saturday.

His departure could spell trouble for Abbas. Fayyad, a Western-trained economist, is well respected in international circles, and he is expected to play a key role in U.S. efforts to revive peace talks.

As part of that effort, U.S. Secretary of State John Kerry has said he plans to announce a series of measures to boost the West Bank economy in the coming days. Fayyad, a former official at the International Monetary Fund with expertise in development, would be key to overseeing such projects.

Fayyad has served since mid-2007 as prime minister of the Palestinian Authority, the self-rule government that administers roughly 40 percent of the Israeli-controlled West Bank. The 61-year-old political independent has focused his efforts on developing the foundations of an independent Palestinian state.

A squeaky-clean public image and willingness to take on entrenched interests has often landed him in trouble with Abbas' long-ruling Fatah movement.

The relationship between Fayyad and Abbas has been tense for some time, and the prime minister told Abbas already late last year that he wanted to quit.

Abbas told Fayyad repeatedly to wait. But the conflict between the two escalated last month over the resignation of Fayyad's finance minister, Nabil Kassis. Fayyad accepted the resignation, but Abbas then overruled the prime minister, effectively challenging his right to hire and fire Cabinet ministers.

Fayyad told confidants in recent days that he was determined to leave. The prime minister also complained about what he said was an attempt by leading Fatah members to undermine him.

Fayyad has good ties with the U.S. and is credited with cracking down on public corruption, securing foreign aid and preparing the groundwork and infrastructure for a future Palestinian state.

The White House said it appreciates the efforts of Fayyad and Abbas in working with the U.S. and other nations to support the creation of an independent Palestinian state.

"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," National Security Council spokeswoman Caitlin Hayden said Saturday. "We look to all Palestinian leaders to support these efforts."

Backed by hundreds of millions of dollars in international aid, Fayyad has built roads and schools and promoted transparency in the government's finances. With the Palestinian Authority stuck in a financial crisis, Fayyad has come under public criticism for the cash-strapped government's failure to pay the salaries of teachers and civil servants on time.

Fayyad has been in office since being appointed in June 2007 by Abbas, following the takeover of Gaza by the rival Islamic militant Hamas. Fayyad's authority is largely limited to the West Bank, while Hamas continues to control Gaza.

Hamas spokesman Fawzi Barhoum criticized rival Fayyad in a statement following his resignation, saying he and his government "worked to protect the Zionist occupation and U.S. interests."

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Associated Press writer Darlene Superville in Washington contributed to this report.

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