Palestinian petrol crisis 'over'

Palestinian taxi driver fills up with petrol bought at a Jewish settlement

A Palestinian official has said the fuel crisis threatening the occupied territories has been resolved.

The head of the Palestinian Petroleum Agency told the BBC an agreement had been reached with the Israeli supplier.

Dor Energy is the only company supplying petrol and cooking gas to Gaza and the West Bank.

On Thursday, petrol stations in the West Bank were forced to close and supplies of cooking gas were reported to be running low.

Ramallah residents react to the Quartet's aid move In pictures

In the Gaza Strip petrol station owners expect to exhaust their supplies by the end of Thursday, news agencies reported.

Mujahed Salameh, head of the Palestinian Petroleum Agency, said the fuel supply would be resumed on Friday.

On Wednesday, Dor cut off supplies to the Palestinian areas because of mounting Palestinian Authority debts amounting to about $26m.

It is not yet clear how an agreement was struck, but Mr Salameh had said earlier on Thursday that Palestinian President Mahmoud Abbas would be contacting Dor to arrange for payment of the debt from the Palestinian Investment Fund.

Doctors in Gaza and the West Bank had warned that a petrol shortage could be disastrous for their work, crippling the ambulance service and preventing employees from reaching clinics.

Financial crisis

The PA has faced financial crisis since foreign aid was frozen after Hamas - regarded as a terrorist movement by the US and EU - won elections in January.

PA FINANCIAL CRISIS $166m: PA's monthly wage bill PA employs 165,000 people 25% of people in West Bank and Gaza depend on PA wages Aid plan challenge to Hamas Cuts squeeze lifeline to sick Press cool on Quartet plan

A plan to channel donor aid directly to the Palestinians, bypassing the Hamas-led government, was agreed on Tuesday.

The EU, UN, Russia and the US said they would set up a "temporary international mechanism" to channel the money for an initial three-month period.

The US also said it would separately give $10m (£5.4m) in aid to the Palestinians through medical and children's charities.