The Palestinian Authority says it has been unable to pay the salaries of tens of thousands of its staff because of Israel’s decision to block funds belonging to the authority.
Tel Aviv froze USD 100 million in taxes belonging to the PA after the two key Palestinian factions, Hamas and Fatah, signed a unity deal last week.
Palestinian Authority’s acting Prime Minister Salam Feyadh, said on Monday that the Israeli move had put the Ramallah-based government in a "very difficult" financial position. The PA pays salaries to its employees promptly on the 5th day of every month.
"We are now on the 9th and we have not been able to meet this obligation," Feyadh said, adding that it is the first time in four years that 150,000 employees, ranging from teachers to street sweepers, are unable to collect their paychecks this month.
Each year, Israel collects hundreds of millions of dollars worth of Palestinian taxes on PA behalf and then transfer it to the authority, which rules the West Bank. The Israeli hold fund makes up 70 percent of PA revenues.
The United Nations, the United States and the European Union, have urged Tel Aviv to transfer the money.
Israel has repeatedly voiced anger at the reconciliation accord signed between Hamas and Fatah which aimed at forming a Palestinian unity government with Israeli Prime Minister Benjamin Netanyahu saying that the Palestinian Authority must choose either to make peace with Israel or with Hamas.
The deal calls for the formation of a joint interim government and the holding of presidential and legislative elections within a year.
The deal, however, does not rule on issues such as whether to recognize and negotiate with the Israeli regime.
Hamas, which controls Gaza, and Fatah which rules the West Bank, have been at odds since the Palestinian resistance movement of Hamas won the Palestinian parliamentary elections in January 2006.
Differences between the rival groups peaked in June 2007 when Hamas took over the Gaza Strip in a bid to "foil a coup plot" by some Fatah elements.
Fatah in response sacked the Hamas government and set up a parallel cabinet in Ramallah.