Palestinian leader Yasser Arafat has suffered liver and kidney failure at the French hospital where he has been in a coma.
Palestinian Foreign Minister Nabil Sha'ath announced the development to the US news channel CNN this evening.
Israel earlier approved Palestinian plans to bury Mr Arafat at his headquarters in the West Bank city of Ramallah.
He had wished to be buried in Jerusalem, but Israel ruled this out.
Egypt announced it was willing to host a state funeral for the Palestinian leader.
In Paris this morning, Tayssir Ragab el-Tamimi confirmed to reporters outside the Percy Military hospital that Mr Arafat, who remains in a critical condition, was still alive.
Sheikh el-Tamimi, who is head of Islamic courts in the Palestinian territories, said 'He is ill and his condition is very bad, but he is still alive.'
The cleric also said there was no question of switching off Mr Arafat's life support equipment, a practice which he said was against Islamic law.
Meanwhile, three senior Palestinian officials who visited the 75-year-old leader yesterday have returned to their headquarters in the West Bank city of Ramallah.
A series of meetings is being held there to discuss a transition of power in the event of his death.
It is understood that Parliament speaker Rawhi Fattuh will serve as caretaker leader of the Palestinian Authority for a period of 60 days. Elections will then take place to elect a new president of the Authority.
Former prime minister Mahmud Abbas will automatically take over as permanent head of both Fatah and the Palestine Liberation Organisation.
Current premier Ahmed Qurei will head up the national security council.
Mr Abbas and Mr Qurei have already assumed those responsibilities on an interim basis.
