Palestinian President Mahmoud Abbas will hold talks with Prime Minister and senior Hamas leader Ismail Haneya in the Gaza Strip on Saturday evening over the financial crisis the Hamas government is confronted with, Hamas cabinet spokesman said.

Ghazi Hamad told reporters in Gaza that the meeting would tackle a wide range of issues with the financial crisis and ways to transfer aid to the Hamas-led government via local banks top on the agenda.

The Hamas government has failed so far to pay the March and April salaries for over 160,000 government employees due to the West's cutoff of crucial aid.

However, the government has recently announced that it has garnered enough aid to pay the salaries, but the delivery of the much-needed money has been delayed since no local or regional bank is willing to help transfer the money out of fear for possible sanctions by the United States which is heading the campaign to isolate the Hamas government.

Hamad also stressed the need to coordinate with Abbas over financial issues in order to smooth out aid transfer. "We want to coordinate with President Abbas. We believe that his attitude is positive and supportive. However, the government should not be bypassed at all," said Hamad.

European donors have been mulling the establishment of a fund to directly deposit money into Palestinian government employees' personal accounts in a bid to bypass the Hamas government.

Abbas and his Prime Minister will also discuss the aftermaths of the formation of a new Israeli government headed by Eud Olmert who has vowed more unilateral withdrawals from the West Bank to fix the borders with the Palestinians by 2010.

Defeating Abbas' long dominant Fatah movement in the January legislative polls, Hamas, or the Islamic Resistance Movement, has taken control of the Palestinian parliament and then the government.

In response to Hamas' persistence in refusing to recognize Israel's right to exist, renounce violence and honor previous Palestinian-Israeli agreements, the United States and the European Union have suspended direct aid to the Hamas government. Israel, meanwhile, has also halted the monthly transfer of about 50 million U.S. dollars of tax revenues it collects on behalf of the Palestinians.