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King Abdullah is seeking to appease Jordan's powerful tribes by naming a conservative former army general as prime minister but he will need to appeal to a wider base to maintain stability and deflect regional turmoil.
Facing widespread protests inspired by uprisings in Tunisia and Egypt, Abdullah sacked his government and appointed Marouf Bakhit as prime minister on Tuesday, angering the main Islamist opposition who said Bakhit oversaw flawed 2007 elections.
Analysts said the decision reflected a traditional priority of the Hashemite royal family to placate "East Bank" Jordanians, the country's original inhabitants who dominate the political establishment, over the interests of Palestinian communities.
The stability of Jordan is vital for Israel, which has a peace treaty and close security cooperation with its eastern neighbour. British-educated King Abdullah is a key political and military partner of the West.
Palestinians and Jordanians of Palestinian origin make up a majority of the 7 mln population.
East Bankers, who have enjoyed a generally higher level of state jobs and subsidies, were alarmed by the threat to their benefits from a sharp economic slowdown and from economic liberalisation promoted by former Prime Minister Samir Rifai.
Protests across Jordan went ahead despite a rushed package of government aid worth $500 mln that focused on raising civil servants' salaries and reversing a decision to freeze state hiring. Protesters called for Rifai's dismissal, although no direct criticism was addressed to the palace.
"The king, by appointing Bakhit, is seeking to calm an influential constituency that defines its interests within the traditional state bureaucracy and feels threatened by excessive free market policies," said Mohammad Masri, political analyst at Jordan's Centre for Strategic Studies.
"However the coming days will show if this strategy is able to contain demands of civil and political society for wider political reforms".
NO CRITICISM OF MONARCHY, YET
Unlike the mass demonstrations in Tunisia and Egypt, where hundreds of thousands of protesters took to the streets demanding the overthrow of the head of state, the rallies in Jordan have not yet targeted Abdullah so far.
Jordanian monarchs have often defused tension in times of crisis by dismissing the cabinet — Abdullah's father King Hussein changed prime minister 45 times in his 47-year reign — though it might be risky to assume the move will always work.
"The monarchy is immune for the time being, but this is not an eternal condition," said Mustafa Hamarneh, political analyst and board chairman of al-Sijil magazine.
"I don't think (Bakhit) is the kind of politician who will institute political change, the kind of change that the country needs badly now," Hamarneh said.
The dismissal of Rifai marked the latest standoff between Abdullah and an establishment that has long resisted changes to a tribally structured society, fearing it could give Jordanians of Palestinian origin more influence and reduce East Bankers' access to government funds.
A leaked U.S. diplomatic cable published by WikiLeaks this week highlighted the scale of that spending, saying 83% of Jordan's $7.71 bln budget last year went towards a "bloated civil service and military patronage system".
Rifai's embrace of private enterprise raised fears he would erode the state's economic role, voiced in the protests in rural East Bank strongholds such as the cities of Karak and Maan.
Jordan's Islamists, the country's biggest political group, are concentrated mainly in Amman and its urban surroundings and have taken a back seat in protests outside the capital.
The Islamic Action Front (IAF), which dismissed Bakhit's appointment as an inadequate step, says it will continue weekly protests which have drawn a few thousand demonstrators in Amman after Friday prayers, saying the protests had broader aims.
"The issue is not about the personality of Rifai. It's about changing the way governments are formed and moving to elected governments that are truly representative," said Sheikh Hamza Mansour, head of the IAF.
Bakhit, a former military intelligence general, served as prime minister from 2005 to 2007, overseeing parliamentary elections which were widely seen as marred by vote-rigging.
Analysts say he is known for his anti-business views and will for now likely reassure public sector employees that their interests will be preserved.
Bakhit's aides say his cabinet will not include figures drawn from the private sector, derided by their opponents as the "digitals" in previous liberal administrations and whom Rifai also came to symbolise.
But an economic policy driven by political expediency will only worsen the country's ability to fight a recession.
Although the authorities managed to cut a $2 bln record budget deficit in 2009 by nearly a third last year, a reversal of austerity measures taken in the wake of protests will strain state finances long kept afloat by aid and remittances.
At least $1.4 bln is already set aside for subsidies, from barley for cattle owners to electricity and water in rural areas. Many Jordanians who have protested in recent weeks will be hoping Bakhit keeps those subsidies intact.
"The issue in Jordan is not about regime change — it's about changing the behaviour of the regime. People still trust the king has more to give people," said Sami Zubaidi, a leading columnist and editor of ammanpost.net, a news website.
"The tribal structure of the kingdom does not allow for a alternative regime than this one. The throne still has the trust of Jordanians," Zubaidi added.
