RAMALLAH, May 2, 2011 (WAFA) - Prime Minister Salam Fayyad Monday said Israeli withholding of funds it was supposed to pay to the Palestinian Authority this week would exacerbate its already serious financial difficulty and make it difficult to pay salaries f or this month.

He appealed to the donor countries to help resolve this crisis through financial assistance and pressure on Israel to force it to release the money as soon as possible, describing the Israeli decision as “political.”

Israel informed the Palestinian government on Sunday that it has decided to suspend monthly transfer of funds it collects on its behalf in taxes and customs on goods imported by Palestinians and entering through its ports. Israel said the reconciliation agreement between Hamas and Fatah was the reason for its decision.

The Israeli decision “harms the ability of the PA to meet its financial obligations and payment of salaries for last month.”

He said Israel had no right to withhold this money because it was not an Israeli grant or financial support. “It is Palestinian money and Israel is required by economic agreements to transfer it to the Palestinian Authority,” he said.

Fayyad said the PA was already facing financial difficulty since revenues from these taxes and customs and what is collected locally make up only two-thirds of the PA revenues. The PA relies on donors support for additional assistance.

The PA got a little over $100 million a month during 2010 from these revenues, which are normally transferred to the PA treasury during the first week of every month. Fayyad projected funds for 2011 at $120 million every month.

“What is needed is to move quickly to pressure Israel to release these funds,” said Fayyad. “But until that happens, we will not be able to meet our obligations, not only in salaries, but in other payments, without additional help. We need urgent and immediate assistance.”

He also said he will appeal to banks to give the PA loans to help it make its immediate obligations.

M.A.