Qatar has agreed to pay the salaries of 40,000 Palestinian education workers for several months, Palestinian Prime Minister Ismail Haniya has said.
Palestinian civil servants have protested over unpaid wages
Mr Haniya said the amount would total more than $22m (£11.1m) a month.
The Hamas-led Palestinian government has been struggling to pay its workforce since March when Western donors suspended direct aid.
They want Hamas to renounce violence and to recognise Israel. Hamas has rejected the demands.
The US and the European Union regard Hamas as a terrorist organisation.
April 2006 - September 2006: $420m
April 2005 - September 2005: $230m
The Israeli authorities have also been withholding tens of millions of dollars in tax revenues they collect for the Palestinian government.
Palestinian teachers in the West Bank and Gaza Strip returned to work last month after ending a two-month strike over unpaid wages.
Mr Haniya made the announcement in the Qatari capital, Doha.
He said Qatar was also studying giving an additional $7m per month to the Palestinian health sector.
Qatar has not commented.
Foreign aid - despite the economic boycott - has still been reaching both the Palestinian Authority and the Palestinians.
In September, the International Monetary Fund (IMF) said more foreign aid had been received by the PA over six months - April to September 2006 - than in the same period last year.
The bulk of this aid came from Arab donors - even though most of the money did not go directly to the Hamas-led administration.
Donors deposited the funds in the bank account of the Palestinian Authority President Mahmoud Abbas.
Mr Abbas is the head of the Fatah organisation, which recognises Israel, and is not subject to the economic boycott.