The European Union on Monday pledged 35 million euros (46.3 million dollars) for two Palestinian infrastructure projects. "We have signed two important agreements for a total amount of 35 million euros... one for a water treatment plant in northern West Bank ... another is for the crossings in Gaza," the Prime Minister of the Palestinian Authority (PA), Salam Fayyad said.

The money comes from the 300 million euros in Palestinian aid that the EU has earmarked for 2012 - the same figure that had been committed in 2011 - EU foreign policy chief Catherine Ashton told reporters.

The two officials spoke after a meeting in Brussels, coming two days ahead of an international Palestinian donors' conference due to take place in the Belgian capital.

The event, co-hosted by the EU and Norway, is "not intended to raise new money," but rather to "take stock" of the needs of the PA "and to indicate what needs to be done," Fayyad said.

He admitted that the PA was "facing serious financial difficulties, a crisis indeed." But the funding shortfall "cannot be seen in isolation from the context that is dominated by the reality of Israeli occupation and the highly capricious control regime that is associated with it," Fayyad complained. "This is a key issue for (international donors) to be preoccupied with," he said.

Continued Israeli encroachment in the West Bank and East Jerusalem - which has led Palestinians to stay away from peace talks - "is not the only issue," Fayyad said. He complained about Israeli "settlers' violence," military incursions into Palestinian territory, and strong-arm reactions by the Israeli army to "non-violent" Palestinian demonstrations.