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Saudi Arabia, Qatar to Fund Palestinians

RAMALLAH, West Bank - Israel froze the transfer of millions of dollars in tax rebates and customs payments to the Palestinian Authority, and Palestinian officials said Wednesday that Saudi Arabia and Qatar have promised $33 million in quick aid to ease a severe budget crisis.

Saudi Arabia promised $20 million and Qatar pledged $13 million to help the Palestinian Authority pay January salaries to 137,000 employees, a senior Palestinian official said. He spoke on condition of anonymity because the deal was not final.

Earlier, Israel said it was suspending the transfer of $45 million in tax and customs revenues it collected in January while Western nations weigh whether to continue supporting the Palestinian Authority after Hamas, with its history of suicide bombings and rejection of Israel, forms a government.

The Israeli action could cause unrest in the West Bank and Gaza.

Western donors, led by the U.S. and EU, funnel about $900 million to the Palestinians each year, most of it designated for reconstruction projects in the impoverished Gaza Strip and West Bank. They are reconsidering that funding, demanding that Hamas recognize Israel and renounce violence.

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