EU foreign ministers meeting in Brussels expressed "serious concern" about the deterioration in the humanitarian, economic and financial situation in the Gaza Strip and West Bank after cuts in EU and US aid payments.
EU External Affairs Commissioner Benita Ferrero-Waldner said she hoped an aid mechanism proposed last week by the Quartet of Middle East peace negotiators that would bypass the Hamas-led government could be put in place by June.
"We are well aware of the urgency of the situation in the Palestinian territories," Ferrero-Waldner told a news briefing.
"We have to get the parameters right, and then we have to get the donors and the partners to accept what we will set up."
The Palestinian Authority needs about $150 million a month to pay salaries and other administrative costs. About two-thirds was covered by foreign donations until the EU and the United States froze aid to push Hamas to recognise Israel, renounce violence and accept past peace accords.
About 165,000 Palestinian Authority employees have not received salaries for March and April, in part because Israel has withheld $55 million in tax and customs revenues collected monthly on behalf of the Palestinians.
Ferrero-Waldner said that she hoped a donors' meeting could be held next week once the mechanism had been mapped out and that other donors, including Israel and Arab states, would contribute.
"Now I think it is crucial that Israel also resume transfers of tax and customs revenues, which are essential to prevent a crisis in the Palestinian territories," she said.
EU foreign policy chief Javier Solana said it would not be possible for the mechanism to cover salaries to all unpaid Palestinian Authority employees.
While Washington had backed setting up the temporary aid mechanism at the meeting of the Quartet - which includes Russia and the United Nations - it was "a different story" whether the US would use it or not, Ferrero-Waldner said.
"I cannot give you any reason but have to tell you that for the time being I don't think they will use the mechanism."
Abbas is expected to address the
Solana said it had not been decided whether the fund would also pay salaries - something Washington has objected to.
An EU official said one possibility under discussion was the payment of "emergency allowances", rather than salaries, directly to personnel such as doctors. He said sanctions were not an issue as payments would not go to the government.
Solana hinted that US congressional resistance might make it impossible for the World Bank to run the mechanism.
"Probably the Congress would be very much (more) restrictive on giving money to the Palestinians than we are," he said.
"We have to talk to the World Bank and see if they want to be the agency in charge of the mechanism or not. There are other possibilities," he said without spelling them out.
Addressing the EU
The EU has ruled out payments to or through the Palestinian Authority but says Mahmoud Abbas, the Palestinian president, could have a liaison role. Abbas will address the European Parliament and meet senior EU officials in Strasbourg, France, on Tuesday.
Asked whether the United States was ready to put money into a new aid mechanism for the Palestinians, state department spokesman Sean McCormack said Washington needed more details about the plan.
"The first step in this is to have a little more clarity and a little more definition as to what this mechanism might be and specifically to whom it might give its money and under what circumstances and for what," McCormack told reporters in Washington.
"There will come a time, I'm sure, in the weeks and months ahead where there is more clarity on that issue."