The new Palestinian prime minister has charged the US with blocking money to pay 165,000 of its public sector workers.

Ismail Haniyeh told a news conference on Wednesday that the Hamas-led government had raised money, but so far has not found a way to get it into the Palestinian areas.

"We have given alternative suggestions and plans, including what has been reported about sending the lists of the employees to the Arab League to have a direct transfer to their accounts," Haniyeh said, but "we even faced American pressure to prevent the direct transfer".

Haniyeh appealed to Arab leaders to face up to the Americans "to stop the siege imposed on the Palestinian people and to stop the political blackmail against the government".

He also called on Palestinian bankers to "show the necessary patriotism" to transfer the funds.  The banks have been hesitant to handle funds for the Palestinian Authority for fear of US sanctions.

U.S. State Department Spokesman Sean McCormack responded to Haniyeh’s accusation with a sharp rejoinder, accusing Prime Minister Haniyeh and his colleagues of trying to blame someone else for a predicament that was of their own making.  "The difficulties that the Palestinian Hamas-led government might be experiencing now are wholly of their own making," said Sean McCormack. "They are going to want to blame others for that. But the Palestinian people need to understand that it is, at this moment, the Hamas-led government that is the single biggest obstacle to their realizing a two-state solution. They are the ones who are standing in the way of that, nobody else."

Secretary of State Condoleezza Rice and colleagues from the other members of the ‘Quartet for Mid-east Peace’ – Russia, the European Union and the United Nations – are expected to discuss the financial situation in the West Bank and Gaza and related issues next Tuesday in a ministerial-level meeting of the informal grouping in New York.

Some European Union countries have suggested channeling money for Palestinian civil servants through the office of moderate Palestinian Authority President Mahmoud Abbas, but the United States has shown no interest in the idea.

The Bush administration says it will increase U.S. humanitarian aid to the Palestinians, while restructuring the program to ensure that no U.S. money goes through Hamas-controlled ministries.