The ministers will also assess the priority areas for the fundsand what contributions should come from other donors, such as the United States and Arab states.

EU foreign policy chief Javier Solana told reporters the European Commission, the EU's executive arm, is working on funding for schools and hospitals without going through the Palestinian Authority.

"We have to do it rapidly. The commission is working very hard on that but it will not be instantaneous," he said.

The EU and the United States have frozen aid to the territories after the Palestinian administration was taken over by the Islamic movement Hamas in March, which is on the EU and U.S. lists of terrorist organizations.

During a meeting in New York last week, the EU, the United States, Russia and the United Nations -- the so-called Middle-East peace quartet -- decided to hammer out a mechanism on how to by-pass the Hamas-led government and get much needed aid money out to the Palestinians.

The money would allow the cash-strapped Palestinian authority to pay wages to the over 160,000 public employees, who have gone without salary since March, and to purchase medicine and food.

Solana said one possible mechanism is for the international community to oversee direct aid payments to fund civil service wages.

"We have to talk to the World Bank and see if they want to be the agency in charge of the mechanism or not. There are other possibilities," he said.

Faced with an aggravating humanitarian crisis in the aid-dependent Palestinian territories, the international community is being forced to soften its hard stance on dealing with the Palestinians, with President Mahmoud Abbas being used to conduct the negotiations.

Following a trip to Moscow, Abbas will address the EU legislators Tuesday in a plenary session in Strasbourg, France, where he will also meet EU Foreign Affairs Commissioner Benita Ferrero-Waldner.

Abbas will ask the European Parliament to quickly put in place the mechanism proposed by the quartet and to urge that the Hamas government be given a chance, Palestinian officials said.