Jerusalem ? High-level talks between Israeli and Palestinian officials were postponed Saturday after the Israeli delegation said it needed more time, Palestinian officials said.

Palestinian Cabinet Minister Saeb Erekat said the meeting Saturday night was to have covered political, economic and security issues and that he hoped it would take place in the next two to three days.

Israeli officials were not available for comment due to the Jewish Sabbath.

Israeli and Palestinian Cabinet ministers said they held two meetings last week _ a resumption of dialogue that had been stalled for months. However, the earlier meetings were believed to have covered economic and reform issues, not political ones.

Meanwhile, in the West Bank on Saturday, five Palestinians wanted by Israeli security forces were arrested north of Nablus, the army said.

Also Saturday, Israeli soldiers stopped Palestinians trying to drive a car past a checkpoint near the West Bank town of Qalqilya. The people in the car fled and soldiers found explosives in the car, the army said. Further details weren’t immediately available.

And in east Jerusalem, Israeli police scuffled with a few dozen Palestinian and foreign demonstrators protesting the closure of the offices of Al Quds University’s president and leading Palestinian moderate Sari Nusseibeh. One demonstrator was arrested before the protest broke up.

Israeli police shut Nusseibeh’s offices this week, saying the university was operating in violation of interim peace accords which ban Palestinian political activity in Jerusalem. The Palestinians want east Jerusalem as the capital of their future state.

Nusseibeh is the top PLO official in Jerusalem. The United States and dovish Israeli officials criticized the closure, saying Israel should be encouraging moderate Palestinians, not antagonizing them.

On the diplomatic front, meanwhile, Israeli Defense Minister Binyamin Ben-Eliezer and Egyptian President Hosni Mubarak plan to meet Monday in the Egyptian port city of Alexandria, Israel media reported Friday. Ben-Eliezer’s spokesman was not immediately available for comment.

Palestinian leader Yasser Arafat had said Friday in an interview with The Associated Press at his Ramallah headquarters that the talks between Israeli Foreign Minister Shimon Peres and the new Palestinian finance and interior ministers were to resume Saturday night.

Israeli officials never confirmed the meeting, however. Erekat said he was informed by Peres’ office late Friday that the Israeli delegation said it needed more time to prepare for the meetings.

Israel has made clear that while it will meet with some Palestinian officials, it will continue boycotting Arafat himself _ holding him responsible for terror attacks.

Nevertheless, Arafat was upbeat about the renewed contact and said Friday more progress could be made if Prime Minister Ariel Sharon “will give them the mandate.” But he criticized what he called a “military escalation” in the West Bank.

In the interview, Arafat said he wouldn’t step down from power but admitted he hadn’t yet decided whether to run in January elections.

“This has to be decided in our senior leadership,” Arafat said. “It is not only up to me. It will be up to many people.”

He was responding to questions about his future amid reports in the Israeli media predicting his imminent downfall, and following calls by the United States for the Palestinians to choose a new leadership “not compromised by terror.”

U.S. Secretary of State Colin Powell said Friday that the U.S. administration won’t deal with Arafat and was waiting for an alternative leadership to emerge.

Powell told the Qatari satellite channel Al-Jazeera that the Bush administration had received an “interesting” letter from Arafat detailing the Palestinian reforms underway. He did not elaborate.

One of Arafat’s close aides, Nabil Shaath, said Saturday the letter was a “goodwill attempt” but would not elaborate. Speaking to the AP in Cairo, Shaath said Palestinian officials would continue to try to persuade the United States to deal with Arafat and support “the legitimacy of the Palestinian Authority.”

Powell also defended the Israeli army presence in Palestinian areas, saying Israel did not want to reoccupy the lands but just put a damper on terrorism. Israeli troops currently control seven Palestinian towns in the West Bank.

Condoleezza Rice, the U.S. national security adviser, told Israel’s Channel Two that the United States had decided that a change of the entire Palestinian political system was necessary because the Palestinian Authority hadn’t done enough to fight terror.

“This is not about Chairman Arafat, this is a political system that needs to change so that you can have accountability in institutions, financial transparency and accountability, security services that are accountable,” she said.

“Never again should one man hold sway over the lives of the entire Palestinian population,” she said.