Palestinian Prime Minister Salam Fayyad on Sunday denied reports that Washington has threatened to cut financial aid if the Palestinians insisted to seek recognition at the United Nations.

A statement by Fayyad's office said the Palestinian premier and U.S. Secretary of State Hillary Clinton discussed the fiscal crisis the Palestinian National Authority (PNA) were suffering from and that donor nations should meet their financial commitments to the PNA.

Israeli media reports said during the phone conversation between Fayyad and Clinton on Thursday, the latter threatened to suspend U.S. aid to the PNA if it asked the UN unilaterally to vote on the Palestinian statehood.

The Palestinians plan to go to the UN next month despite the U. S. and Israeli opposition. For Washington, the recognition of a Palestinian state should result through a negotiated agreement with Israel.

Peace talks between Israel and the Palestinians stopped last year over a dispute on the construction of Jewish settlements in the West Bank.