RAMALLAH, West Bank ? Yasser Arafat and his prime minister-designate, Mahmoud Abbas, ended their bitter standoff over the composition of a new Cabinet on Wednesday, clearing the way for a new Mideast peace initiative backed by Washington.

The long-awaited “road map” holds out the prospect of ending 31 months of Israeli-Palestinian fighting and establishing a Palestinian state. It also would respond to pressure on the United States by Arab and European countries to promote Mideast peace at a time when its troops occupy Iraq.

The United States and Israel have boycotted Arafat, accusing him of links to terrorism. President Bush said he would unveil the plan only after the formal establishment of Abbas’ government — which U.S. and Israeli officials hope will amount to a means of sidelining Arafat.

“When that happens, we will officially provide the road map to the parties soon thereafter,” White House press secretary Ari Fleischer said Wednesday.

Wednesday’s deal was made possible when Arafat backed down under intense international pressure and withdrew his challenge to Abbas’ security team in exchange for a promise he would be consulted on major decisions — including, presumably, a crackdown on Palestinian militias.

Israeli Prime Minister Ariel Sharon responded cautiously Wednesday night, saying only that it was, “of course, very important that on the other side there should be a person whose wish is for an end to terror and for peace.” Israel, he said, “will make every effort to reach a diplomatic agreement that, God willing, will lead to peace.”

Palestinian and Egyptian officials said on condition of anonymity that Arafat, in exchange for backing down, was given guarantees regarding his personal safety and was told Egypt would ask Israel to lift a travel ban on him in effect since December 2001.

The nature of the new Palestinian government — and the road map’s chances of ultimate success — remained somewhat unclear.

The road map was worked out late last year with the European Union, Russia and the United Nations. The Palestinians have agreed to accept the proposal in principle. Israeli leaders also have indicated approval, but have raised several important objections.

It calls for an end to Palestinian attacks and a freeze on any expansion of Jewish settlements in the West Bank and Gaza, followed, perhaps this year, by a Palestinian state with provisional borders. Final borders, the status of Jerusalem and the fate of Palestinian refugees would be decided later.