NABLUS, West Bank (AP) – Masked gunmen loyal to Yasser Arafat broke up a conference of reformers from his Fatah movement who were calling for a “revolution,” as the veteran Palestinian leader faced new, sharp divisions among his people.

The incident in the West Bank city of Nablus was just the latest in weeks of internal Palestinian unrest. The unrest centers on charges of widespread corruption in Arafat’s administration, and beneath the surface, frustration with lack of progress toward creation of a Palestinian state or economic development after four years of bloody conflict with Israel.

Less than a week after Arafat ended a crisis in the Palestinian Cabinet, he was again under pressure for changes from among his own supporters, although there was no suggestion Arafat himself should go.

About 20 men, all armed and many wearing ski masks, burst into a conference of more than 70 Fatah officials, firing over the heads of the presiding officials and claiming that the conference was an anti-Arafat conspiracy.

The weeklong meeting was meant to discuss reform and new elections for the Fatah leadership, which were last held 15 years ago.

No one was injured by the gunfire, but the meeting broke up. Several delegates met with the gunmen to discuss whether the conference could continue.

The gunmen identified themselves as members of the Al Awda Brigades, a small militant group.

In a letter released later to reporters, the Fatah leaders warned Arafat that corrupt officials “are using their position in the Palestinian Authority to steal and to break the law,” and that the Palestinian government was losing the public’s trust.

“President Arafat, this might be the last chance for reforming our situation, before reaching the end. We need a revolution within our Fatah movement,” said the letter.

In a separate development, Mohammed Dahlan, a former security chief and powerful figure in the Gaza Strip, threatened huge demonstrations unless Arafat reforms his government within 10 days.

“Arafat now sits on the bodies and ruins of Palestinians at a time when they most need support,” Dahlan was quoted Sunday as saying by a Kuwaiti newspaper.

Demanding reform in the Palestinian Authority, Dahlan was quoted as saying he didn’t want to destroy Arafat’s image, but to “correct it so that it will stay beautiful.”

At a ceremony at his headquarters on Sunday, Arafat ignored an Associated Press reporter’s question about internal unrest, restating instead his insistence that the Palestinians must have a state in all of the West Bank, Gaza Strip and east Jerusalem.

“There can be no concession of any piece of land on this sacred earth,” he said, receiving an honorary doctorate degree from Al Quds University, a Palestinian school in a Jerusalem suburb.

Arafat, who has not left his compound in Ramallah for more than two years, retains his iconic status among the Palestinian people, despite growing discontent with his policies.

Some Palestinian officials attributed the unrest to Dahlan, whose speeches over recent months advocating reform in the Palestinian leadership could be seen as an attempt to undermine Arafat’s position.

Renewed criticism of the cronyism and corruption in the Palestinian leadership came after Arafat smoothed over a rift with Prime Minister Ahmed Qureia, who resigned two weeks ago over his inability to control an outbreak of lawlessness in the Gaza Strip.

Arafat persuaded Qureia to withdraw his resignation with a promise to share control of the security forces and to let Qureia’s Cabinet ministers do their jobs. But the deal failed to quell the discontent that rippled across Gaza and spread to the West Bank.

On Saturday, militants of the Al Aqsa Martyrs’ Brigades burned the offices of the Jenin governor in the northern West Bank and threatened more violence unless the Palestinian Authority gives them money.

Zakaria Zubeidi, who orchestrated the Saturday raid, led a march of 150 armed militants Sunday from the Jenin refugee camp, pledging their loyalty to Arafat.

“I am an Al Aqsa soldier, and I am also a soldier of Abu Amar, our leader and our first teacher,” said Zubeidi, using Arafat’s popular name.

AP-ES-08-01-04 1324EDT