The Palestinian Prime Minister Salam Fayyad has said his administration is unable to pay the wages of its some 150,000 employees due to Israel’s refusal to transfer Palestinian tax to the Palestinian Authority. The government wages have gone un-paid since their due date of May 5th. Palestinian leaders claim it is the first time in 4 years that the wages have gone un-paid. Mr Fayyad stated that the administration is in debt of 100 million USD from last year’s budget and that that figure is increasing by 30 million USD per month as per this year’s budget. He said that he was in contact with other Arab countries to fund the shortfall, Maan news agency has reported this morning.

In response to the situation, France has become the latest state to announce extra funding to the PA. It has announced a 10 million euro donation as a means of covering the un-paid wages and criticized the withholding of the funds by Israel. French Foreign Ministry spokesman Bernard Valero said that the move was “detrimental to the reforms and the establishment of institutions put in place under the [Palestinian] authority’s President Abbas.”

The US has branded the move by Israeli to withhold the funds as “premature” and has stated it will maintain a “wait and see” attitude to the outcome of any new unity government. US State Department Deputy Mark Toner said that the Obama administration is “looking to see what this reconciliation agreement looks like in practical terms, before we make any decisions about future assistance” Haartz reported last night.

Israel claims that it is waiting to see what the arrangements are between Hamas and Fatah under the new unity agreement before it releases the funds. The taxes are collected, by Israel, on goods going into Palestinian territory on behalf of the Palestinian administration.