ABU DHABI, UNITED ARAB EMIRATES, JUNE 20 -- The federation's Supreme Council said today that it has reinstated the ruler of Sharjah, who was ousted by his brother in a bloodless coup earlier this week.

It also named the coup leader -- Sharjah's national guard commander -- as crown prince of the emirate, one of seven that make up this federal state at the Persian Gulf's southern end.

The Supreme Council, made up of rulers of the emirates, issued a statement declaring that Sheik Sultan bin Mohammed Qassimi is "the legitimate ruler of Sharjah." There was no clear indication from the coup leader, Sheik Abdulaziz who had accused his brother of economic mismanagement, whether he would accept the ruling.

Abdulaziz had said he was prepared to fight with 3,000 guardsmen under his command, and that he would step down only at the request of his family, which traditionally rules the principality.

{Abdulaziz appeared to disagree with the decision in a statement reported by Reuter, in which he asked reporters: "Is it right for a crown prince to be the older one?" Abdulaziz is older than his brother.}

Despite the uncertain response from Abdulaziz, Arab diplomats in Abu Dhabi said the council's decision indicated a compromise had been reached. Abu Dhabi is the federation's capital and the leading emirate among the seven.

Abu Dhabi, which at first appeared to endorse Abdulaziz's move, is believed to have reversed itself for fear that a Sharjah palace power struggle would be a dangerous precedent for the federation. It most likely won Abdulaziz's supporters on that basis, the diplomats said.

Abdulaziz, a wealthy businessman, said he replaced his brother with the backing of the Qassimi clan because of what he called financial mismanagement by Sultan. He said Sharjah was staggering under a $1.3 billion debt and he would ask rich Arab states to help stabilize its economy.