RAMALLAH, West Bank (Reuters) - Anybody would be forgiven for thinking Salam Fayyad a politician on the campaign trail. Hardly a day goes by without the Palestinian prime minister touring a town or village to meet and greet the public.

His efforts are bearing fruit. Even some of Fayyad's rivals admit that his stock is on the rise among Palestinians tired of leaders who have failed to deliver them statehood or prosperity.

Fayyad could even be in line for higher office, they say, although the premier routinely denies such personal ambition.

They acknowledge that the former World Bank economist, a political independent who is not a member of the long dominant Palestine Liberation Organisation (PLO), is making an impact.

"Love him or hate him, the one who is running the show at the moment is Salam Fayyad," said one senior figure in the PLO's dominant Fatah faction, which is headed by Fayyad's boss, Palestinian President Mahmoud Abbas, also known as Abu Mazen.

Long a favorite of the Western governments that fund the Palestinian Authority, Fayyad has won respect at home for serial initiatives, including investment programs and a to build institutional foundations for a state by 2011 -- something that has discomfited Israelis opposed to Palestinian statehood.

As established parties struggle to prove their relevance, Fayyad has gone some way to shedding an unflattering image, painted by his critics, that he is a tool of Western aid donors.

"We could get to the point where the only option for the Palestinian people as a successor to Abu Mazen is Salam Fayyad," said the senior Fatah figure, who like several others, would speak to Reuters on the subject only on condition of anonymity.

Public speculation on who will succeed Abbas, 75, is a taboo among Fatah members. But speaking privately, several echoed the view that the lack of any consensus on a Fatah member who might replace him could result in the outsider Fayyad taking over.

Abbas is not going anywhere for now. His term has been extended until an election can be held. That is unlikely to happen soon due to hostility between Fatah and the Islamist Hamas movement. Reconciliation is needed for a vote to go ahead.

Death or incapacitation are the only factors that could remove Abbas from office in the foreseeable future. His office denied recent rumors of ill health that triggered a wave of speculation on who might succeed him. One obvious Fatah insider candidate, Marwan al-Barghouti, remains in jail in Israel.

Fayyad, 58, has been prime minister for three years. He enjoys as much if not more Western backing than Abbas. The president appointed Fayyad when Hamas seized control in Gaza in June 2007, restricting Abbas's writ to the Israeli-occupied West Bank and prompting him to dismiss a Hamas-led unity government.

FATAH CONCERNS

To Hamas, Fayyad is no more than a stooge in an U.S.-Israeli plot to undermine it. He also has critics closer to home.

Fatah, dominant among Palestinians since the decades it was led by Yasser Arafat, has been suspicious of Fayyad since Arafat made him finance minister in 2002. Fatah members say a man once seen as a mere technocrat has developed a taste for power.

Fayyad's control over the Palestinian Authority's purse strings is one of Fatah's concerns. On his watch, it has been unable to bestow patronage as it used to when it controlled the PA's, largely aid-funded, finances after 1990s peace accords.

Fayyad's corruption crackdown has also ruffled feathers.

In a sign of concern over its political fortunes, Fatah has demanded a cabinet reshuffle that would restore the movement's control over key portfolios, including the finance ministry.

In a recent article, leading Fatah figure Fahmy Zaareer reminded readers that Fayyad was an international bureaucrat in Washington when Fatah started building the Palestinian state:

"With respect for Dr. Fayyad's contributions, writers must remember that his official journey in national work began in 2002," he wrote. "Our history did not begin then."

Fatah has struggled to preserve its stature since Arafat died in 2004. While few expected Abbas to fill Arafat's shoes, his image has not been helped by political blunders. Palestinians joke that he treats Ramallah, the PA's West Bank center, like a weekend holiday retreat, spending most of his time abroad.

Fayyad, by contrast, is anything but aloof. He would show up to your birthday party if invited, goes another West Bank joke.

Few Palestinians believe that Fayyad's institution-building project will yield independence, unless it is accompanied by U.S. pressure on Israel to cede control of occupied land.

Despite that skepticism, many credit him with improvements: his Western-trained police have pushed armed gangs, some of them notionally loyal to Fatah and other political factions, off the streets; and the economy in the West Bank has been growing.

The limited available opinion poll data show Abbas and Hamas's Haniyeh with the most support among Palestinians. Fayyad has a low but increasing level of support. Analysts say past polls may be a poor guide to how he might fare in a future vote.

Senior Fatah figures have no doubt Fayyad, the long-time outsider, is now very firmly a contender:

"(Fatah) does not control the finances, or government," Sabri Saidam, a member of the Fatah Revolutionary Council, told Reuters when reflecting on Fayyad's advantages as a candidate.

"After three years in office and with all the projects he has opened, it would be stupid to believe that this man does not have a popular base."

(Editing by Samia Nakhoul)