The Palestinian Authority is Broke

According to Prime Minister Ismail Haniyeh, the new Hamas-led government has run out of funds and failed to pay tens of thousands of Palestinian public workers on Saturday.

Western diplomats said the government needs to find a bank willing to handle its finance, while the Islamic group admitted their impossibility in running the West Bank and Gaza Strip without funds from the outside. Haniyeh appealed to Arab nations to send more donations, while he vowed to do his best in making up for the tens of millions of dollars in aid withheld by international donors.

According to some Western officials, Hamas had been trying to move the Authority's treasury account from the Arab Bank to a local Palestinian bank, attempting to reduce the risk of their funds being frozen. But the request was denied because the Authority's precarious finances and for fears of sanctions from regulators in the United States and Europe.

Part of the money was for paying the salaries of 140,000 people, sustaining one-third of the population. "The Palestinian Finance Ministry has received an entirely empty treasury in addition to the debt of the government in general," Haniyeh added.

After Hamas took the lead last weak, winning Parliamentary elections in January, the Israeli government froze tax revenue transfers to the Authority. Hamas also will not receive Western aid if it does not give up violence, recognizes Israel and abides by interim peace deals. Israel welcomed Western funds for the Palestinians, as long as the money does not reach Hamas, considered by Israel and the United States a terrorist group.