Palestinian officials have resorted to carrying cash into the territories after Western donors cut financial aid

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Western countries have demanded that Hamas renounce violence and recognise Israel's right to exist as a condition for lifting the boycott.
 
Earlier this month, Arab foreign ministers vowed to ignore the aid freeze imposed on the Palestinian Authority and start stepping up payments.
 
Israel withdrew its troops from the border a year ago following a deal tasking the European Union with monitoring the Rafah crossing.
 
But Israel has complained of arms smuggling and imposed frequent closures.