Iran will donate $50m (£28m) to help fund the Palestinian Authority, after the withdrawal of aid from the West, the Iranian government has announced.
Hamas's Khaled Meshaal has toured the Middle East fundraising
The US and EU cut funding after Hamas - which they consider a terrorist group - won Palestinian elections in January.
Iran's pledge followed a visit from top Hamas official Khaled Meshaal, after the group appealed to Muslim nations to help make up the shortfall.
On Saturday Russia said it would also grant financial aid.
Mr Meshaal, at a fundraising event in the Iranian capital, Tehran, said the Palestinian administration was $1.7bn in debt.
He said a further $170m a month was needed to run the administration, out of which $115m went to paying salaries.
The EU gives about 500m euros ($600m) a year to the Palestinian Authority, but said last week that aid would be suspended.
Hamas has refused EU demands to recognise Israel and renounce violence.
The US Treasury this week further tightened the screws on Palestinian cash by banning American nationals from doing business with the Hamas-led authority.
'Work with Hamas'
Iran's Foreign Minister Manouchehr Mottaki said Iran was determined to help the Palestinians.
"I am honoured to announce that Iran has donated $50m to help the Palestinian nation," he said in a televised speech.
"We warn that if the aid is cut and if this continues in the near future, this land will witness a humanitarian disaster," he added.
Russian Foreign Minister Sergei Lavrov said last week that withholding aid to the Palestinians was a mistake.
"Hamas should... recognise Israel and sit down at the negotiating table. But for that it's necessary to work with them," he said.