"Banks in Arab countries should have the courage to transfer aid to the Palestinian people," said Haneya at a weekly cabinet meeting.

"I appeal to the Arab banks to send the money and I appeal to our Palestinian banks to have the courage to receive the money," he added.

"Every Palestinian family is suffering because the government employees haven't been paid since March, although the Palestinian cabinet has managed to ensure enough money for the salaries," he continued.

Haneya made the call when a serious financial crisis due to the West's cutoffs of aid and Israel's withholding of tax revenues is deteriorating in the Palestinian territories.

The Hamas-led government has been unable to pay over 160,000 government employees since March with an empty coffer and frustration of transfer of aid donated by Arab and Muslim countries.

The Hamas cabinet has announced that it has succeeded in garnering enough money from Arab and Muslim countries to pay government employees.

But local and regional banks have shunned the transfer of the money for fear of possible U.S. sanctions and lawsuits.

The United States and the European Union have cut off direct aid to the Palestinians since Hamas, or the Islamic Resistance Movement, refuses to renounce violence, recognize Israel's right to exist and honor previous Palestinian-Israeli agreements.

Israel has also halted the monthly transfer of about 55 million U.S. dollars of tax revenues it collects on behalf of the Palestinians since Hamas' sweeping victory in the January Palestinian legislative polls.

The aid cut has led to a grave financial crisis and some Palestinian officials have warned of a humanitarian disaster and political unrest.