With the situation of law and order "steadily worsening" in the Palestinian-controlled areas, the Palestinian Authority (PA) is "in real danger of collapse," the UN envoy for the Middle East said on Tuesday.

In an open briefing to the Security Council, Terje Roed-Larsen, the UN special coordinator for the Middle East peace process, issued the unprecedented warning in a sign of mounting international pressure on Palestinian leader Yasser Arafat.

"Despite a well-intended Prime Minister (Ahmed Qurei), the paralysis of the PA has become abundantly clear, and the deterioration of law and order in Palestinian areas is steadily worsening," he said.

He noted that clashes and showdowns between branches of Palestinian security forces are now common in the Gaza Strip, where the PA's legal authority "is receding fast in the face of the mounting power of arms, money and intimidation."

In the West Bank, Jericho is becoming the only Palestinian city "with a functioning police," he added.

"This collapse of authority cannot be attributed only to the Israeli incursions and operations inside Palestinian towns. The PA is in deep distress, and is in real danger of collapse," he warned.

Roed-Larsen said the Palestinian Authority has so far made no progress in reorganizing security forces despite consistent promises by its leadership.

The security reforms are necessary "to put an end to the steadily emerging chaos in Palestinian areas, to restore law and order and -- most importantly -- to reestablish the PA as a fully credible partner for the international community," he stressed.

The UN envoy also criticized Israel, saying the Israeli government has made no progress either on its core obligation to immediately dismantle settlement outposts erected since March 2001 and to move toward a complete freeze of settlement activities.

"Settlement expansion has to come to a complete stop," he said.

The envoy's harsh criticism of the Palestinian Authority surprised the Palestinian permanent observer to the United Nations, Nasser al-Kidwa.

"It is strange for him to play the role of the cheerleader, basically, of Mr. Sharon (Israeli prime minister)," al-Kidwa told reporters after attending the open briefing.