Palestinian Authority Prime Minister Salam Fayyad said Sunday that taxes must rise to reduce dependence on donors.

Fayyad, a former World Bank economist, faced a barrage of questions on the state of the economy during a meeting with journalists in Ramallah.

Reporters asked Fayyad what support his government would offer to assist struggling families and the unemployed, and whether taxes would rise.

The PA premier said in order to provide support for citizens, Palestinians faced a choice between aid dependency and increased taxes.

"If you don’t want us to depend on the donors more, then taxes will have to increase. What do you want? Taxes or support?" he asked.

Fayyad said the cost of living had increased by 40 percent since 2001, and that salaries increased by 50 percent over the same period.

Despite monitoring by international donors, Fayyad said his government had invested in projects near the separation wall and in Area C, the 60 percent of the West Bank under full Israeli control.

The PA implemented 515 projects in Area C, proving to the world that the land was part of the Palestinian homeland, Fayyad said.

Meanwhile, Fayyad's administration invested in 178 projects near the wall and 13 in Jerusalem, the Ramallah premier said.

In total, 2568 projects have been initiated, and so far 2,000 have been completed, he explained.

Fayyad rejected criticism that he inaugurated small projects at the expense of larger initiatives.

"You criticize because I inaugurate and cut the ribbon for small projects, what is wrong with that?

"I don’t look at the criticism and those who wish to see the government fail; we will continue with the same successful economic project."

Fayyad said unemployment had fallen to 106,000 in the West Bank and 112,000 in Gaza.

He said his government had been successful because of its sound administration, and because it improved monitoring and tax collection.