AZA CITY, April 21 — As his leaders clashed over what men would hold which seats in a new Palestinian government, Jamal Abu Rumi, college graduate and father of seven, sat at a curbside falafel restaurant here today with less than a dollar in his pocket, places to go and no hope of getting there.

For five days, Mr. Abu Rumi, who studied geography at the University of Beirut, has not been able to get to his home in southern Gaza because Israel closed two checkpoints inside Gaza. He has not been able to get out of Gaza to his job at an Israeli construction site because during the Passover holiday Israel has shut the gates even to legal Palestinian workers like him.

Like other Palestinians interviewed here today, he has been watching the political maneuvering in Ramallah, in the West Bank, with far less hope than disgust.

"Everybody is thinking about how to form a government to serve his own interests," he said. "Not to serve the people. Not to build a state."

Yes, Mr. Abu Rumi would like to see peace with Israel on terms that would "make the people comfortable." But he would also like to see what he called the little things: a Palestinian office he could complain to about the Israeli closures; good schools; an end to official corruption.

President Bush has made confirmation of the new Palestinian government his condition for proceeding with a new Middle East peace plan. But with two days left before a legal deadline, Mahmoud Abbas, the Palestinian prime minister, has all but given up trying to persuade Yasir Arafat, the Palestinian leader, to endorse his proposed cabinet, his allies said. They remained divided over one man, Muhammad Dahlan, a security official proposed by Mr. Abbas but rejected by Mr. Arafat.

European diplomats and Arab leaders are pushing Mr. Arafat to accede. Some officials predicted a last-minute deal, others an impasse. In Ramallah, it looked like dramatic brinkmanship: with an international peace plan on the line, a battle was raging between two founding fathers of the mainstream Fatah movement, a test of wills that could end with one or both diminished, if not destroyed.

But from the fraying neighborhoods of Gaza City and its refugee camps, the battle seemed more trifling.

A woman who gave her name as Khitam, 30, a mother of five, feigned surprise when asked about the new government as she picked through clothes at a vendor's stall here.

"Was there a government?" she asked. "Where's the old government to talk about appointing a new one?"

Disappointment is the wrong word for people's reactions; it implies they have hope. An opinion poll released a week ago by the Palestinian Center for Policy and Survey Research found that only 43 percent thought that Mr. Abbas would assemble a government that would win the public's confidence.

It is not that people do not want change. They say they long for it, but they do not expect it. Anger at the Israeli occupation blunts but does not neutralize Palestinians' frustration with their own leadership.

"People are not asking for the moon," said Salah Abdel Shafi, an economist who directs the Gaza Community Mental Health Program. "People want to see small changes. They want to see Palestinian Authority vehicles stop at red lights."

He predicted that attitudes about the Palestinian Authority would quickly brighten once Palestinians saw improvements on the ground, like investigations of corruption.

But now, Palestinians look at the heavily guarded mansions here of men like Mr. Abbas and Mr. Dahlan, and they wonder whose interests they have at heart.

Mr. Abdel Shafi met with Mr. Abbas as he assembled his government, and he said he was impressed with his approach and his proposed cabinet. But he said many Palestinians saw Mr. Abbas as "part of the Palestinian leadership responsible for this misery," and he wondered, "If you were so unhappy with Yasir Arafat, why didn't you say something?"

Mr. Abbas, who is known as Abu Mazen, put forward at least five men regarded as reformers. But that was from a list of at least 19 that included several of Mr. Arafat's old guard and others widely viewed as corrupt. One associate of Mr. Abbas said today that he had erred in trying to compromise, to satisfy both Fatah's senior members and upstart legislators in the Palestinian Legislative Council. He tried at first to conciliate rather than confront Mr. Arafat.

Mr. Abbas gave no interviews or speeches to present an agenda or rally the public. People may be frustrated with Mr. Arafat, known as Abu Amar, but they still feel respect and even affection for him. "Abu Amar has been struggling for us all these years," said Mahmoud Abu Ras, 23, who works in a computer store. "Abu Mazen, we don't know anything about him."

A majority 71 percent of Palestinians supported a "mutual cessation of violence" with Israel, according to the poll by the Palestinian Center for Policy. But in the absence of such a halt, 57 percent supported attacks on Israeli civilians. The poll was conducted through face-to-face interviews with 1,315 Palestinians and had a margin of error of 3 percentage points.

With Mr. Abbas publicly silent about reform — and everything else — many Palestinians concluded that his agenda was only to provide security for Israel. Mr. Arafat, a master at this game, fostered that image by placing the fight over Mr. Dahlan at center stage.

Mr. Dahlan has boasted in meetings here that he could wipe out Hamas; this is a small town, and word got around.

"Spy! Collaborator!" a group of teenage boys shouted when Mr. Dahlan's name was mentioned to them.

For many Palestinians, the fight in Ramallah is not all bad news. To them, it also shows a fragile Palestinian democracy is emerging.

In his restaurant, Yousef Mahmoud Hamarnah, 68, posts two pictures of Mr. Arafat. But he says the Palestinian leader is getting old.

"I hope there'll be a new government," said Mr. Hamarnah, who has two sons in Germany. "The Palestinians are everywhere — in the States, in Cairo, in Jordan. Once they know there is a new government, they will all come back to build their state."