Ahmad Majdalani urged Arab nations to fulfill their financial pledges to the PA in order to allow salary payments.

He said cabinet ministers had tasked the finance minister with preparing a report on the PA's financial crisis and potential solutions, which will be presented at the government's weekly meeting on Tuesday.

Economic analyst Naser Abdul Kareem told Ma'an there are two main factors in the PA's financial problems -- the failure of international aid to arrive, and the increased cost of loans to the government by Palestinian banks.

The PA has built up considerable debts from the bank sector, he said.

The head of the Palestine Monetary Authority said earlier in June that the government in Ramallah had reached the maximum limit of borrowing from Palestinian banks.

Jihad Al-Wazir said in a statement that banks in Palestine increased lending to the government by over $300 million in the last two months, and cannot lend more unless repayments from donor countries come through.