CBNNews.com - RAMALLAH, West Bank - The Palestinian Authority (PA) says it is facing bankruptcy after nearly 90 donor countries and international organizations failed to fulfill pledges to fund Palestinians in the West Bank.

Donors pledged $7.7 billion to the PA at the Paris conference in December 2007, but the PA has only received $900 million so far.

"We are facing a real crisis," a top PA official told The Jerusalem Post, adding "we are on the brink of bankruptcy."

The deficit in the PA budget has increased from $1.6 billion to $2 billion in six months.

PA officials in Ramallah said on Monday that the PA would not have enough money to pay the July salaries of at least 150,000 public servants and that several government buildings may be forced to close if the deficit worsens.

Another PA official cautioned that the looming financial crisis could prevent a future peace agreement with Israel.

"We will lose the support of the Palestinian public if we stop paying salaries to our civil servants and policemen," he said. "This is happening at a time when Hamas is receiving large sums from Iran and radical Islamic groups."

According to the Palestinian Economic Council for Development and Reconstruction (PECDAR), the PA is to receive the money over a three-year period, and the PA was slated to receive up to $3 billion during 2008.

"Most of the Arab countries are now setting conditions for providing us with financial aid," the PA officials said.

"Some are saying that they will give us the money only after we end our differences with Hamas, while others are suddenly talking about the need for reforms and transparency in the Palestinian Authority."

Many Arab countries slowed funding after the fall of the Fatah-Hamas unity government in 2007.

Source: The Jerusalem Post