Israeli Prime Minister Ariel Sharon failed to convince British Prime Minister Tony Blair to cut all ties with the Palestinian president during their meeting in London on Monday. Sharon called Palestinian National Authority President Yasser Arafat the “main obstacle” to the current Middle East peace plan.

Britain’s refusal to stop dealing with Arafat was a major blow to Sharon, who has been trying to oust Arafat for years. The Israeli leader is on a new campaign to persuade foreign governments to severe links to the Palestinian president, saying that Arafat is undermining Israel’s deals with Palestinian Prime Minister Mahmoud Abbas (Abu Mazen).

“Sharon raised the question of dealing with President Yasser Arafat and the foreign secretary made it clear that the British position is with the wider European Union position: As the democratically elected leader of the Palestinian Authority, we will continue to have contacts with Arafat where we judge it to be useful,” a British official said.

Sharon accuses the Palestinians, especially Arafat, for the lack of movement with the peace process. Palestinians, however, specifically argue that Sharon is holding up peacemaking progress by rejecting their calls for freedom for all of the estimated 6,000 Palestinians held by Israel. Moreover, Israel has failed to complete a single step in its part of the U.S.-backed ‘roadmap’ to peace.

The meeting between Sharon and Blair came during Sharon’s visit to the United Kingdom to discuss the peace plan. But another roadblock in its progression was confirmed when Sharon declared that it will not stop construction of the West Bank “apartheid” wall, despite international opposition. The wall, which is being built inside the green line, is isolating Palestinian villages, restricting movement outside and within the West Bank and cutting Palestinians off from their land.

While Sharon was meeting with Blair, Abbas held talks with Arafat in the West Bank city of Ramallah and declared an end to a rift with the Palestinian president. The two leaders worked out a power-sharing agreement Monday night that guarantees Arafat influence in negotiations with Israel and Palestinian security forces.

Abbas’ declaration of loyalty to Arafat came after last week’s threat to quit as prime minister and his resignation from a top policy-making committee headed by Arafat. Some Palestinian politicians accused Abbas of failing to win substantial concessions from Israel after the cease-fire was declared by Palestinian factions and attacked his negotiation skills.

“The disputes are over, and things are all right,” Abbas told reporters after meeting Arafat in his ruined compound in Ramallah.