Abbas withholds salaries to pay Gazans 

Source:

Palestinian President Mahmoud Abbas's Western-backed government said it had begun making payments to Palestinians in the Gaza Strip who lost their homes in last month's Israeli offensive.

Abbas's prime minister, Salam Fayyad, said that as a result, he did not have enough money to pay salaries to government workers in both the Israeli-occupied West Bank and the Hamas-ruled Gaza Strip.

Government workers have declared a strike, citing Fayyad's inability to pay wages at the beginning of the month.

The financial trade-off underscored the difficult balancing act facing Fayyad, who, in addition to running a government dependent on foreign aid, wants to take the lead in reconstruction efforts in the Gaza Strip to sideline Hamas.

The Islamist group, which won a 2006 Palestinian election and seized control of the Gaza Strip from Abbas's secular Fatah forces 18 months later, has also started making partial payments to Palestinians who lost their homes in the war.

"It is unclear when we will receive money from donors. So I'm not going to put a date on when I can pay salaries," Fayyad told reporters in the West Bank city of Ramallah, where his government is based.

Some 1,300 Palestinians were killed in Israel's three-week bombardment of the Gaza Strip. About 5,000 homes were destroyed, along with many roads, bridges and government buildings. Reconstruction is estimated to cost at least $2 billion.

Fayyad got the money to begin paying Palestinians in the Gaza Strip earlier this month when Israeli Prime Minister Ehud Olmert approved the transfer of 175 million shekels ($43 million) from the West Bank to the Gaza Strip.

Olmert aides said the money belonged to the Palestinians and would not be used to benefit Hamas, which is shunned by Western powers for refusing to recognise Israel and renounce violence.

Washington wants credit for reconstruction to accrue to Abbas's government rather than Hamas's administration in the Gaza Strip. Hamas receives financial support from Iran.