Palestinian prime minister tries to calm protests

RAMALLAH, West Bank – The Palestinian Authority's prime minister announced a package of subsidies and tax cuts on Tuesday in an effort to quell protests against the high cost of living in the West Bank and the government's failure to pay full salaries to civil servants.

Salam Fayyad has been the target of several days of demonstrations in the Palestinian territory, where many residents blame him for their financial woes. They are the largest internal protests against the Palestinian self-rule government in its 18-year history.

In the latest rallies, hundreds of protesters gathered outside Fayyad's office in Ramallah on Tuesday morning. It was a peaceful demonstration, but a day before anti-government rallies across the West Bank had been marred by violent outbursts.

Fayyad announced later in the day that he would cancel a series of price hikes in fuel and cooking gas. He told a news conference he also plans to lower a sales tax and said he would fund the subsidies by cutting the salaries of government ministers and other top officials.

Fayyad claimed the crisis was beyond his control and said Israel's occupation of the West Bank is the "major reason" for the problems.

"The ability of the government to deal with the prices is very limited, and the Palestinian situation is more difficult," he said.

In an effort to help the Authority deal with the crisis, Israeli Prime Minister Benjamin Netanyahu announced late Tuesday night that he ordered $63 million from the tax money it collects for the Palestinians to be paid in advance.

In accordance with interim peace deals, Israel collects millions of dollars in customs, border and some income taxes each month on behalf of the Palestinians and relays them to the West Bank government.

Fayyad's salary cuts may deepen his conflict with West Bank's dominant Fatah Party, from which many of the senior officials affected hail. Fatah leaders already consider Fayyad a rival, and have encouraged protests against the prime minister, a U.S.-educated economist and a political independent.

The Palestinian Authority, which governs parts of the West Bank, is grappling with a budget deficit because the U.S. and Arab countries that fund the body have not yet delivered the money.

Palestinian Finance Ministry officials say donors owe $1.2 billion in pledged money, which is more than a quarter of the government's annual budget.

The Authority is the largest employer in the West Bank. Its employees have not received full salaries since June.