On Saturday the World Bank said that Israel's blockade of Gaza had created cash shortages that could collapse its banks. A day earlier, the banks had shut down due to lack of funds.
Also sounding an alarm, the International Monetary Fund (IMF) said the spiralling Gazan crisis risked bolstering Palestinian militants who have alternative supplies of cash and contraband thanks to smuggling tunnels from neighbouring
"The liquidity crisis could lead to the collapse of the commercial banking system in
Palestinian Prime Minister Salam Fayyad, whose Western-backed government is based in the Israeli-occupied West Bank, said this week that there was not enough cash in
Fayyad said 250 million Israeli shekels ($63 million) was needed to pay these salaries but
The closure was stepped up after a raid by Israeli forces on Nov. 4 triggered a surge in rocket attacks by Gazan militants.
Cash-strapped Palestinian civil servants could prove easy recruits for militants groups, the IMF said in a statement:
"The inability of employees and aid beneficiaries to draw their salaries and aid payments, raises the risk that, over time, these groups would turn to employment opportunities and benefits provided by those with easier access to cash from other sources (such as through the tunnels between Gaza and Egypt)."
An Israeli military spokesman said at least 15 rockets and mortar bombs have been fired from
Faris Hadad-Zervos, an aide to Middle East peace envoy Tony Blair, voiced understanding for
Date created : 2008-12-07