ANATA, West Bank (AP) -- In a surprise reversal, Prime Minister Ehud Barak decided Tuesday not to hand a West Bank suburb bordering Jerusalem to full Palestinian control as part of an upcoming Israeli troop withdrawal.

Barak's announcement came after opposition hard-liners and some members of his coalition vehemently protested government plans to transfer the Palestinian neighborhood of Anata just east of Jerusalem to Yasser Arafat's Palestinian Authority.Barak's critics said control over Anata, a crowded Palestinian neighborhood of 8,500, would give Arafat a bridgehead in his campaign to make east Jerusalem a Palestinian capital.

Palestinian officials reacted with disappointment. "This is a bad indication that the government of Barak is wasting time by reversing decisions and being unable to take decisions," said Palestinian Cabinet minister Ziad Abu Zayyad.

The decision underscored difficulties Israel and the Palestinians face in reaching agreement on the status of Jerusalem, which is one of the issues to be addressed in a final peace treaty due Sept. 13.

Barak has in the past shied away from handing the Palestinians control over West Bank suburbs of Jerusalem, even at the price of a crisis with the Palestinians and a five-week suspension of peace talks that only ended last week.

His aides have said the prime minister feels it is unwise to trigger a political uproar over Jerusalem now, preferring to present concessions regarding Jerusalem only as part of a final peace agreement.

Still, Israeli negotiators recently proposed a withdrawal from three Jerusalem suburbs -- Anata, Beituniya and Ubeidiya -- as part of an upcoming withdrawal from 6.1 percent of the West Bank, said a senior Palestinian official who spoke on condition of anonymity.

The proposal apparently was aimed at improving the atmosphere between the two sides after the most recent crisis. Arafat initially demanded control over three larger, more populated suburbs, but Barak turned him town.

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It was not immediately clear whether Beituniya and Ubeidiya, which are further away from Jerusalem, are still part of the proposed withdrawal.

Jerusalem Mayor Ehud Olmert toured Anata today, accompanied by Interior Minister Natan Sharansky, who said he opposed a transfer of the village to full Palestinian rule. Olmert said handing over Anata would be "a grave step toward dividing Jerusalem."

Cabinet minister Haim Ramon and Public Security Minister Shlomo Ben-Ami accused the opposition of cynically exploiting the broad Israeli consensus on Jerusalem and misleading the public.

Deputy Minister Ephraim Sneh indicated that Anata initially was to be transferred. "There was such an idea, but the prime minister prefers that the village will not be included in the 6.1 percent (withdrawal)," he told Israel radio.

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