Palestinian Authority faces budget crisis

  The Palestinian prime minister pleaded for "Arab brothers" to come to the Authority's assistance 

The Palestinian Authority has had to cut salaries paid to its civil servants by half as it faces a major budget shortfall.

Prime Minister Salam Fayyad called on "donors and our Arab brothers" to come to their aid, saying that international donors - notably Arab countries - had failed to deliver promised funding.

Donors had provided only $330m of a total $970 commitment for the year.

The authority has been relying on bank loans to tide it over until now.

However, in a recent report the World Bank noted that Palestinian borrowing was "unsustainable" - it was nearing its borrowing limit."Today is a day of crisis," said the prime minister in Ramallah on Sunday.
Foreign donations account for just over a quarter of the total Palestinian budget of $3.7bn.