The vote was rescheduled for Saturday.
Meanwhile, a suicide bomber Thursday detonated explosives near an army base in the West Bank. Initial reports said the attacker was a woman. The bomber was killed, and two Israelis wounded, one seriously. There was no immediate claim of responsibility.
Also Thursday, CBS News Correspondent Robert Bergerreports there are fresh indications that Arafat's health could be deteriorating. A joint team of Jordanian and Egyptian doctors arrived in the West Bank town of Ramallah, to treat the ailing leader, who has been suffering from a mysterious stomach ailment for 10 days.
Palestinian officials say the 74-year-old Arafat has had a high fever, severe diarrhea and vomiting, but they denied a British newspaper report that he suffered a mild heart attack. One Palestinian Web site reported that Arafat might have been poisoned.
Legislators had already convened in the West Bank town of Ramallah and had been waiting for an hour for the session to begin when the announcement of the postponement was made.
"Everyone has his own script and so we feel that we need more time. We are sorry for troubling you," Deputy Parliament Speaker Ibrahim Abu Najar told legislators.
The argument focused on the formation and makeup of the new Cabinet. On Sunday, Arafat had installed an eight-member emergency Cabinet which could have served for one month before seeking approval from parliament.
However, Palestinian Prime Minister Ahmed Qureia decided to seek parliamentary approval already on Thursday in order to turn his Cabinet into a regular government as quickly as possible. However, many of the legislators, including those who had not been included in the Cabinet, voiced objections.
Israel has low expectations for Qureia, reports Berger.
Israeli foreign minister Silvan Shalom says Israel won't deal with any regime that's a rubber stamp for Arafat.
"Because he's trying to undermine any regime and any efforts and any prime minister that will move toward peace with Israel," Shalom said.