The Palestinian Authority said on Monday it had not been able to pay public sector salaries for the first time since 2007 because of Israel's decision to halt the transfer of tax funds. Prime Minister Salam Fayyad said Israel's decision, taken in protest at a Palestinian unity deal involving the Hamas - had put the Ramallah-based government in an impossible financial position.
Fayyad said the Palestinian Authority (PA) had paid salaries to its 150,000 employees on the 5th day of every month since mid-2007. "We are now on the 9th and we have not been able to meet this obligation," he said. The Israeli government headed by Prime Minister Benjamin Netanyahu decided on May 1 to halt the transfers of Palestinian taxes which make up 70 percent of PA revenues, citing fears that the money would go to Hamas, a militant group hostile to Israel. "The situation was difficult before Israel halted the transfer of money. Now, with Israel halting the transfers, it is impossible," Fayyad said.
He added the PA would not be able to pay the monthly wage bill, which totals almost $170 million, until Israel handed over the tax money or foreign governments stepped in to fill the financial gap.