JERUSALEM – With Yasser Arafat gravely ill in a French hospital, some of his powers were formally transferred to other Palestinian officials Thursday, as Israel readied plans to stem potential unrest in the event he dies.

Arafat’s health deteriorated sharply Thursday, and conflicting reports at times suggested that he had lapsed into a coma or died. But aides and health officials disputed that, describing the 75-year-old Palestinian president as critically ill.

The death of the man who has reigned over Palestinian politics for four decades would be a landmark event in the Middle East, and all sides are busily preparing for how the landscape of the Israeli-Palestinian conflict could be reshaped.

With little hope for Arafat’s imminent recovery, Palestinian leaders huddled in emergency meetings to divvy up key political and security powers to Prime Minister Ahmed Qureia and his predecessor, Mahmoud Abbas.

Qureia will take over urgent financial and security matters of the Palestinian Authority while Arafat is absent, Qais Abdel Karim, a member of the Palestine Liberation Organization’s executive committee, told The Associated Press. Qureia was expected to visit the Gaza Strip on Friday with security chiefs and representatives of 13 Palestinian factions, including Hamas and Islamic Jihad, to temper any threat of violence.

Abbas will shoulder more of the political responsibilities, running Arafat’s Fatah movement as well as the Palestine Liberation Organization.

With small demonstrations unfolding already in a few West Bank towns, leaders also urged ordinary citizens to exercise restraint in the event that Arafat dies.

Seeking to avoid a violent breakdown of order in the Palestinian territories, top Israeli military officials convened Thursday to discuss the plan reportedly known as “Operation New Leaf,” to thwart potential rioting or mass demonstrations. The Israeli military has not moved forces to expected problem areas, but commanders were told to be on standby, the AP reported.

At the top of the agenda, Israeli authorities are confronting the issue of where Arafat would be buried. If his remains are returned to the West Bank or Gaza Strip, Palestinians could seek to have him permanently interred in Jerusalem at the Al Aqsa Mosque, a site of particular honor for Muslims.

But Israeli Prime Minister Ariel Sharon, who considers Arafat a terrorist, said in a statement last week that he would not permit that. In the past, Israel has suggested that a compromise could allow Arafat to be buried in Abu Dis, a Palestinian suburb close to Jerusalem, but the Israeli army could yet block that plan as well.

Doctors still do not know the precise nature of Arafat’s illness, though they have downplayed reports of stomach cancer or leukemia. After suffering for several weeks from stomach pains, diarrhea and spells of unconsciousness, Arafat was flown last Friday to Paris, leaving his half-ruined complex in Ramallah for the first time in nearly three years.

Concern grew Thursday amid conflicting reports that he had taken a dramatic turn for the worse. At one point, Luxembourg Prime Minister Jean-Claude Juncker, who is set to assume the rotating presidency of the European Union in January, told reporters at a summit of European leaders in Belgium that Arafat “passed away a quarter hour ago.” He later retracted the statement.

A spokesman said it was a “misunderstanding,” which occurred after a journalist had called Juncker seeking comment on unconfirmed reports that Arafat had died.

The French television station LCI quoted an unidentified French medical official as saying today that Arafat was in an “irreversible coma” and “intubated” – a procedure that usually involves threading a tube into the lungs, according to AP. The tube is frequently connected to a life support system that helps a patient breathe.

“Mr. Arafat is not dead,” said Christian Estripeau, spokesman for the Percy military hospital just outside Paris. “The clinical situation of the first few days following admission has become more complex.”

French President Jacques Chirac paid a brief visit to the 75-year-old Arafat yesterday afternoon and saw him alive, Chirac’s office said.

In Washington, President Bush was asked by a reporter for his reaction to the report that Arafat had died.

“My first reaction is God bless his soul,” Bush said at a nationally televised news conference. “My second reaction is that we will continue to work for a free Palestinian state that’s at peace with Israel.”