Third day of medical tests for Arafat
Yasser Arafat is seen Friday en route to France in this photo released by the Palestinian Authority.
A spokeswoman says doctors have ruled out leukemia.
Thousands march for Yasser Arafat in Gaza and the West Bank.
What an Arafat replacement would mean to the Mideast peace process
PARIS, France (CNN) -- Palestinian leader Yasser Arafat was undergoing a third day of medical exams at a Paris hospital Sunday to determine the extent of his illness.
The Palestine Liberation Organization Saturday said Arafat's health was improving, but sources close to Palestinian leaders raised the possibility that the era of Arafat as Palestinian leader may be coming to an end.
"He woke up in a good mood, in good shape after a real rest," said PLO representative Leila Shahid in Paris. "He feels generally better, his general condition is better."
But just what his ailment is remains unclear.
Shahid said tests exclude leukemia "for the time being."
Sources close to the Palestinian leadership told CNN's Christiane Amanpour that before Arafat left Ramallah for France, his four teams of doctors thought he most likely had leukemia but wanted French doctors to make a diagnosis.
The sources also said Arafat is not in complete control of his mental faculties and cannot make important decisions or communicate coherently.
Aaron David Miller, president of Seeds of Peace, a non-profit organization that brings teens from rival nations together to learn leadership skills, told CNN he saw Arafat in August and again 10 days ago.
"The transformation was marked," Miller said.
"In August, he was alert and forceful and argumentative, as always," he said. Following the recent visit, Miller said Arafat had lost a significant amount of weight, could not focus and "needed a lot of help to get up to greet me. I'm not sure he could recognize me."
Seeds of Peace is considering opening an office in Ramallah, and Arafat has been a strong supporter. The program now focuses on Palestinians, Israelis, Egyptians, and Jordanians.
Arafat is only being visited by his wife Suha and one other Palestinian official while in the hospital. The sources close to the Palestinian leadership said they had knowledge of his condition.
But Palestinian representative to the United Nations Nasser al-Kidwa and Arafat adviser Mohamed Rashid rejected the sources' descriptions of Arafat's health.
Members of Arafat's family also told CNN he remains sharp and able to make decisions.
In Ramallah, Prime Minister Ahmed Qorei and former prime minister Mahmoud Abbas have assumed additional responsibilities during Arafat's absence, Palestinian chief negotiator Saeb Erakat said.
Abbas, secretary general of the executive committee of the PLO, is acting chairman of the PLO, and Qorei, deputy head of national security council, is acting head of the security committee, Erakat said.
He said Arafat approved the changes before leaving for France.
"Things will function ... in accordance with the basic law and the internal law of each of these institutions, and hoping that Arafat will recover and resume his duties," Erakat said. "Meanwhile, things will function for the benefit and interests of the Palestinian people."
But sources who spoke to Amanpour said Qorei and Abbas have come to an agreement for Abbas to become leader in the event that Arafat dies or is incapacitated.
Abbas would be chairman of the PLO and the Fatah organization, and Qorei would be in charge of the Palestinian Authority and security services, the sources said.
Erakat said only that the temporary changes were made during Arafat's absence, and that Palestinian institutions were working to see that Palestinians' needs are met.
The PLO executive committee met Saturday, leaving Arafat's seat empty.
The sources who spoke with Amanpour said some Palestinians oppose making any formal plan while Arafat is alive, and would rather have communiques issued in his name. There is no agreement, and there is still something of a power struggle under way, the sources said.
Both Abbas and Qorei have publicly been at odds with Arafat, even as they have stated allegiance to him.
Each complained he was not allowed enough power over security forces or finances to allow important steps in improving Palestinian life and reducing terrorist attacks by Palestinian militant groups.
Meanwhile, in his weekly cabinet meeting, Ariel Sharon Sunday said Arafat would not be buried in Jerusalem if he dies as long as Sharon is Israel's prime minister, Israeli officials told CNN.
Palestinians, including Arafat, recognize Jerusalem as the capital of a future Palestinian state, and Arafat says he was born in the holy city. Arafat has not formally requested to be buried in Jerusalem.