Recently, the US cancelled talks in which ministers had been expected to approve urgent measures leading to the payment of Palestinian salaries, including those of the security forces, frozen after a Hamas government came to power. Western diplomats said a teleconference of the ministers of the Quartet (US, Russian Federation, EU and UN) had been scheduled for Wednesday, June 7, after the main powers considered proposals discussed in Brussels last week on the funding mechanism for the PA that would bypass Hamas.

A European diplomat said the move reinforced fears that the US was intent on "regime change" in the Palestinian-ruled territories. Tensions between Hamas and Fatah forces in Gaza and the West Bank have been exacerbated by the aid freeze.  "At best it’s a delaying tactic, at worst it’s an attempt to scupper the entire mechanism," said the diplomat. "The Americans want the Palestinian Authority to fail."
Salaries have not been paid to Palestinian civil servants since January, and the EU has been urgently trying to work out a payment system that would ease the humanitarian crisis in the Palestinian territories. The US has stopped aid being channeled through Arab banks by warning them of possible penalties.
On Tuesday, June 13, Foreign Minister Tzipi Livni said Israel will decide whether to release tens of millions of dollars of tax revenues which, in fact belong to the Palestinians, into an international plan to aid Palestinians once the plan is complete.
The plan is being drawn up by European Union officials, and was last month agreed in principle by the Quartet of Middle East peace brokers – the EU, United States, United Nations and Russia. The EU, charged with putting together the aid plan, has urged Israel to release the $55 million a month in tax revenues it collects on the Palestinians’ behalf and has been withholding since Hamas came to power.
Asked at a news conference whether Israel would do this, Livni said it was waiting for the final plan. "We are waiting for the conclusions of these discussions… Israel will then take its own decision about the taxpayers’ money."
The EU’s executive Commission has proposed using the plan to provide equipment, especially to the health sector, and to pay utilities bills and allowances for essential service workers.
However, Western diplomats in Jerusalem said on Sunday Washington had been pressing the European Union to adopt a U.S. alternative calling for welfare payments to poor Palestinians, who could use the money to cover doctors’ bills and buy food.
EU External Affairs Commissioner Benita Ferrero-Waldner accepted there was disagreement in the Quartet on allowances and assistance to those in greatest need.
One EU official said after EU foreign ministers discussed the plan in Luxembourg on Monday that it would be "difficult" to get the United States to participate, but another said discussions with the Americans were continuing.