Hamas government makes urgent appeal for funds

GAZA, Apr 25 (Reuters) Palestinian Prime Minister Ismail Haniyeh made an urgent appeal to Arab nations today to send money to the Hamas-led administration just days before a second month of government salaries are overdue.

The government has warned of economic collapse within months after Israel froze tax receipts and Western nations cut aid to the Palestinian Authority. March salaries to 165,000 government workers have gone unpaid while April wages are due next week.

Foreign Minister Mahmoud al-Zahar, in Qatar as part of a trip to Arab states to raise funds, said Saudi Arabia had pledged million in emergency aid. That is on top of cash promises from other Arab nations that has yet to arrive.

But Palestinian officials and Western diplomats say banks have so far been unwilling to transfer funds to the Palestinian Authority under threat of U.S. sanctions.

''The government is exerting itself and continuing to make efforts with all parties to secure the needs of our people, in particular the salaries,'' Haniyeh said before a cabinet meeting.

The United States regards Hamas as a terrorist entity. The Islamic militant group is sworn to destroy Israel and has rebuffed international demands to recognise the Jewish state, disarm and accept peace deals.

Haniyeh said that earlier on Tuesday he had called Amr Moussa, the Secretary General of the Arab League, and also Saudi Crown Prince Sultan, to ask for funds.

Government salaries indirectly support as many as one in four Palestinians.

Without the wages, and with aid cuts since the new government took office on March 29, economic activity has begun to dry up in the occupied West Bank and the Gaza Strip.

Many markets are largely deserted and shop owners say business is way down, especially in Gaza.

Sporadic protests have broken out over unpaid March salaries, and some officials said the situation could deteriorate further if the funding blockade continues.

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