The United Nations' top Middle East diplomat expressed growing concern on Wednesday about the precarious finances of the Palestinian Authority and the economic isolation of Gaza. The diplomat, Robert H. Serry, special coordinator for the Middle East peace process, told the Security Council that the Palestinian Authority “faces an acute challenge in maintaining its solvency” and noted its late payment of government salaries. Mr. Serry also said that during a visit this month to Gaza, which is run by the anti-Israeli militant group Hamas, he was “struck by the fragility and unsustainability of the present situation.” His assessment, part of a broader appraisal that held out little hope for renewed Palestinian-Israeli peace negotiations, coincided with the release of a World Bank report that said the Palestinian Authority was facing the worst financial crisis since its founding in 1994 and was not ready to support statehood, partly because of an over-reliance on foreign aid. “It is critical for the Palestinian Authority to increase trade and spur private sector growth,” the report said. It also said Israeli security restrictions on the Palestinian territories “continue to stymie investment.”
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