Israel has cleared a $25 million transfer to Gaza amid fears that the cash shortage there could lead to the collapse of local banks. The money will be used to pay civil servants, but Gazan officials said it would not be enough.
AFP - Israel authorised on Wednesday the transfer of 25 million dollars into Gaza to pay wages of civil servants amid warnings that the liquidity crisis could bring down the besieged territory's banks.
But the sum fell short of the 250 million shekels (63 million dollars, 49 million euros) that Palestinian prime minister Salam Fayyad said were necessary to pay Palestinian Authority employees.
Israeli Defence Minister Ehud Barak authorised the transfer of 100 million shekels (25 million dollars) from banks in the occupied West Bank to the Hamas-ruled Gaza Strip, his office said.
The transfer was to come following a "personal request" by Fayyad and Stanley Fischer, the head of Israel's central bank, "in view of the severe cash crisis in Gaza."
A Palestinian treasury official told AFP on condition of anonymity that the transfer has not yet been made but that it should take place on Thursday.
Palestinian economy minister Kamal Hassuneh said the amount was insufficient to pay the salaries of government employees.
"We need 70 to 75 million dollars for salaries. And we need to transfer this amount every month, not just one time," he told AFP.
Last week the World Bank warned that the crisis could cause the collapse of the banking system in Gaza, where Israel tightened an already crippling blockade following renewed violence at the start of November.
The Palestinian Authority headed by president Mahmud Abbas was ousted from Gaza when the Islamist Hamas seized power in June 2007, but it continues to pay the salaries of some 70,000 civil servants in the impoverished territory.
Separately on Wednesday, interim Israeli Prime Minister Ehud Olmert met Barak and Foreign Minister Tzipi Livni to discuss the situation in Gaza amid growing calls for tough action to combat Palestinian rocket and mortar attacks.
Israel and Hamas agreed in June to an Egyptian-brokered ceasefire, but the truce nearly collapsed on November 4 when Israeli troops advanced into Gaza to destroy a tunnel and militants responded with a barrage of rockets.
The ministers were briefed by top military and intelligence officials and discussed what actions Israel should take "in view of Hamas's repeated violations of the understandings reached with Egypt on the calm," Olmert's office said.
Palestinian militants in Gaza fired one rocket at southern Israel on Wednesday, causing no damage or injuries, an army spokesman said.
Date created : 2008-12-10