After a meeting with Palestinian Interior Minister Nassr Yousef in the West Bank city of Jericho on Tuesday, Ward said Palestinian security forces should strive to keep various armed factions in check.
"The Palestinian Authority has taken essential steps to ... restructure its forces, to cause a single line of authority to exist," Ward said.
"That will enable a more effective mechanism for dealing with law and order on the streets as well as for combating terrorists," he said.
Ward hailed Palestinian President Mahmoud Abbas's public calls for "one authority, one law and one gun" but said there was "more to be done, to be sure".
The general was appointed by US President George Bush in February to help Abbas stamp out corruption and lawlessness in security services, which according to Israel have fuelled bloodshed.