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Mon 1 Aug 2011 07:41 AM

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Palestine pays out full wages after strike threat

Cash-strapped PA halved salaries of employees in July amid $970m budget gap

Palestine pays out full wages after strike threat
Palestinian Prime Minister Salam Fayyad. The Palestinian Authority relies on foreign aid to pay the salaries of about 150,000 workers

The Palestinian Authority will pay its employees' salaries
in full in August but still faces a financial crisis which forced it to pay
only half wages in July, Prime Minister Salam Fayyad said on Sunday.

Earlier on Sunday, the head of the public sector workers'
union had raised the prospect of a strike in protest at the wage cuts. The
union was due to meet on Monday to take a decision on possible industrial
action.

Fayyad, who is also finance minister, said he expected full
salaries to be paid on Tuesday.

"In view of the continued financial difficulties,
payment of the salaries in full will greatly limit the ability of the PA to
meet other needs during the coming month," he said in a statement, without
going into details.

Fayyad has blamed a fall in aid from Arab states for largely
causing the financial crisis. The PA continued to seek the foreign aid needed
to overcome the problem, he said on Sunday.

The PA relies on help from foreign states to pay the
salaries of about 150,000 Palestinians in the West Bank and Gaza Strip and
monthly allowances to another 75,000 people.

The PA needs aid of $970m to fill a gap in its 2011 budget.
As of July 3, it had received only $331m.