Fayyad: Palestinian economy devastated by Israeli freeze

JERUSALEM (JTA) — Israel’s suspension of transferring tax revenue to the Palestinian Authority has had a "devastating impact" on the Palestinian economy, PA Prime Minister Salam Fayyad said.

Fayyad told The Associated Press that he will be unable to pay the salaries of tens of thousands of civil servants.

Israel has been withholding about $100 million in tax payments collected on the Palestinians’ behalf since the Palestinians were accepted as a full member of UNESCO, the United Nations scientific and cultural agency, and is continuing to withhold them over Fatah-Hamas unity talks.

During a meeting in Cairo last week between PA President Mahmoud Abbas and Hamas leader Khaled Mashaal, the two leaders were unable to bring about a Palestinian unity government.

Hamas on Sunday said it had not pledged to abandon the armed struggle against Israel, as had been reported in the Arab media.

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