RAMALLAH (Ma'an) -- The Palestinian Authority finance ministry announced Sunday that it would pay part of salaries owed to public sector employees by the end of the day.
The salaries of prisoners families will be paid completely while public sector employees will receive 52 percent of their salaries, the ministry said in a statement.
The aid-dependent Palestinian economy in the West Bank faces a financial crisis due to a drop in aid from Western backers and wealthy Gulf states, as well as Israeli restrictions on trade.
On Saturday Israel's finance minister said Israel will stop collecting tax revenues for the Palestinian Authority and will not hand over any money if President Mahmoud Abbas continues to seek observer state membership.
"If the Palestinians continue to advance their unilateral move they should not expect bilateral cooperation. We will not collect their taxes for them and we will not transfer their tax revenues," Finance Minister Yuval Steinitz said.
Interim peace deals task Israel with collecting taxes and customs duties on the Palestinian Authority's behalf amounting to around $100 million a month, on goods imported into the Palestinian territories.
Israel has previously frozen payments to the Palestinian government during times of heightened security and diplomatic tensions, provoking strong international criticism.
In July, Israel and the Palestinian Authority agreed on a revamp of revenue collection to try to help relieve the Palestinian government's deepening debt crisis.