Many teachers across the southern Gaza Strip and occupied West Bank refused to go to school on Saturday, the first day of a new academic year.
Others reached schools but refused to take classes.
Jamil as-Shihada, head of the teachers' union, said: "The strike is larger than expected. Eighty to 95 per cent of teachers in Rafah and Jenin are on strike.
"We have been patient for six months, but today we can be no more."
In an attempt to topple the elected government, the United States and Europe have imposed crippling freezes on funding, preventing Hamas, which formed a government after the group's landslide win in January parliamentary elections, from paying in full the salaries of 170,000 civil servants since March.
Aljazeera's correspondent in Ramallah reported that all non-military employees at the Palestinian presidential office have also stayed away from work.
Students and teachers at numerous state-run schools in Gaza went to work on Saturday only to find that classes were not being held.
Ismail Haniya, the Palestinian prime minister, on Friday urged teachers not to strike and to "defy the blockade asphyxiating the Palestinian people".