Palestinians Receive Aid from Saudia Arabia, Qatar

Israel froze the transfer of millions of dollars in tax rebates and customs payments to the Palestinian Authority, and Palestinian officials said Wednesday that Saudi Arabia and Qatar have promised $33 million in quick aid to ease a severe budget crisis.

Saudi Arabia promised $20 million and Qatar pledged $13 million to help the Palestinian Authority pay January salaries to 137,000 employees, a senior Palestinian official said. He spoke on condition of anonymity because the deal was not final.

Earlier, Israel said it was suspending the transfer of $45 million in tax and customs revenues it collected in January while Western nations weigh whether to continue supporting the Palestinian Authority after Hamas, with its history of suicide bombings and rejection of Israel, forms a government.

The Israeli action could cause unrest in the West Bank and Gaza.

Western donors, led by the U.S. and EU, funnel about $900 million to the Palestinians each year, most of it designated for reconstruction projects in the impoverished Gaza Strip and West Bank. They are reconsidering that funding, demanding that Hamas recognize Israel and renounce violence.

The 137,000 people on the Palestinian Authority payroll, including almost 60,000 security officers, are supposed to receive their salaries Thursday. Even with promises of new aid, a Palestinian official said the checks would not be ready until Monday at the earliest.

Even a week's delay could mean hardship for large numbers of Palestinians. The Palestinian economy is in tatters after five years of violence with Israel. Unemployment is 22 percent, and even the meager government salaries support extended families in many cases.

Failure to pay the January salaries could pose the most difficult test yet for Hamas, which has resisted international demands to recognize Israel, disarm and renounce violence.

Israeli Foreign Ministry spokesman Mark Regev said Israel was "not out of sync" with the rest of the world in holding up the transfer. He said in the past, when Israel suspected the Palestinian Authority was using funds to support violence, Israel put its money into escrow accounts, releasing it later. He said that would be the practice this time, as well.

Palestinian deputy Finance Minister Jihad al-Wazir, said contacts are in progress with the Israelis and he was hopeful the funds could be transferred in the coming days. He said there are also contacts with world donors aimed at maintaining levels of foreign aid.

Economics Minister Mazen Sinokrot said Israel is in violation of interim peace accords, which require it to transfer the customs and taxes. "The Israeli side is not permitted legally to freeze the money of the Palestinian Authority, which is the money of the Palestinian people," he said, adding that Israel owes $53 million, not $45 million as it maintains.

Regev said Israel and the world cannot be expected to "finance people who believe that the solution is the destruction of Israel by suicide bombings and violent jihad."

In all, the Palestinian Authority needs some $116 million every month to cover the payroll. It has repeatedly borrowed from banks and received additional support from donor countries. However, the Palestinian Cabinet secretary, Samir Hleileh, said it appears unlikely the banks would lend to the government in times of uncertainty.