Armoured lorries containing $25m have arrived in Gaza after Israel allowed the first transfer of cash to the territory since October.

The move on Thursday came after the World Bank warned that the liquidity crisis in the Gaza Strip caused by Israel's siege could cause the collapse of the banking system there.

The money, from Palestinian banks in the West Bank, is expected to be used to pay the salaries of civil servants and allow aid groups to provide cash to impoverished people in Gaza.

But the funds are much less than the $63m that Salam Fayyad, the Palestinian prime minister, has said was necessary to pay salaries.

Al Jazeera's Ayman Mohyeldin, reporting from Gaza City, said: "The $25m will be just a drop in the bucket, enough to eliviate the short-term crisis but not enough to develop sustainable commerce in Gaza."

He said people had been queueing up outside banks ahead of the arrival of the lorries containing the money from across the border.

'Severe cash crisis'

Kamal Hassuneh, the Palestinian economy minister, said the approved transfer was
insufficient to pay the salaries of government employees.

"We need $70-to-$75 million for salaries. And we need to transfer this amount every month, not just one time," he said.

Ehud Barak, Israel's defence minister, approved the transfer following a "personal request" by Salam Fayyad and Stanley Fischer, the head of Israel's central bank, "in view of the severe cash crisis in Gaza," his office said.

The Palestinian Authority was ousted from Gaza after Hamas seized power in June 2007, but continues to pay the salaries of around 70,000 civil servants in the territory.