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Last Updated: Wednesday, 3 May 2006, 14:01 GMT 15:01 UK
Hamas blames US for salary block
Palestinian Prime Minister Ismail Haniya
Hamas leaders have been courting Middle East states for aid
Hamas says it has raised enough cash to pay salaries owed to Palestinian workers but blames the US for pressuring banks to block payments.

Prime Minister Ismail Haniya said Hamas had gathered new donations from Arab and Muslim states after the US and European Union suspended financial aid.

But the US has tried to stop the funds being transferred straight into workers' accounts, Mr Haniya said.

The US and EU want Hamas to drop calls for the destruction of Israel.

Many Palestinians directly employed by the Palestinian Authority (PA) have not been paid since March.

Hamas dominated elections to the Palestinian parliament held in January, but has faced a financial crisis since forming a government.

'Problems'

Speaking in Gaza City, Mr Haniya criticised what he said were US efforts to stem the flow of cash into the PA and called on Arab governments to confront "US pressure".

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

"The Palestinian government has managed to collect the necessary money from Arab and Islamic countries," he said.

"This money is largely enough to pay salaries but we have had problems in terms of getting the money.

"The problem is the result of the Israeli occupation, the American administration and Europe's weakness as well as banks refusing to fulfil their tasks."

Earlier this week Hamas said it expected to ease the financial crisis with funds paid to workers directly from the Arab League.

But Arab banks fear that if they were to assist Hamas, the Americans might take steps to freeze them out of the international financial system, says the BBC's Alan Johnston in Gaza.

The Palestinian Authority employs some 165,000 people and the UN estimates a quarter of the Palestinian population relies on government salaries.

The world body has warned that the humanitarian and security situation will deteriorate rapidly if Palestinian salaries go unpaid for much longer.


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