U.S., Palestinians sign $150 million agreement

Wed Mar 19, 2008 10:25am EDT

(Corrects pledges in paragraph 8 to $7.4 billion form $700 million)

RAMALLAH, West Bank, March 19 (Reuters) - The United States agreed on Wednesday to transfer $150 million in budgetary support to the Palestinian Authority as part of past pledges to boost President Mahmoud Abbas' government.

Western-backed Palestinian Prime Minister Salam Fayyad said it was "the largest sum of assistance of any kind to be transferred to the Palestinian Authority by any donor in one trench since the Palestinian Authority's inception (in 1994)."

Fayyad, who signed the agreement with U.S. Consul General Jake Walles, told reporters the U.S. contribution "was coming to us at a time of great need and it will help our efforts in building towards Palestinian statehood".

Walles said the United States had pledged $550 million at a donors' conference in Paris in December last year that would be allocated for budgetary support, development projects and humanitarian assistance.

"We're going to continue to implement the other aspects of our pledge," Walles said.

The United States had already announced that $148 million would go to the United Nations Relief and Works Agency for Palestinian refugees to provide humanitarian assistance and an additional $200 million would go to development projects.

"We very much appreciate that Prime Minister Fayyad has taken steps to put in place a system of transparency and accountability in the public finance system in the Palestinian Authority," he said.

Donors had pledged $7.4 billion at the Paris conference to support the Fayyad's three-year reform and development plan.

Fayyad had said the cash-strapped Palestinian Authority had asked donor states to speed up the allocation of budgetary support aid so his government could pay salaries of more than 160,000 government employees and meet its other bills.



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