Some more statistics and information about how utterly dependent the Palestinian Arabs are on free money:
This article says that the PA pays $118M every month just for salaries. Since the PA employs some 140,000 people, that means that each "worker" gets over $10,000 a year on the average. This may not be high by Western standards, but compare this to Egypt, whose average annual income is $1530 (in 2001) and Jordan's is $1750. (I am assuming that "average annual income" is per worker; I couldn't find a definition.)
I also found this article from 2000 showing how thousands of Palestinian Arabs are employed by NGOs and getting paid far more than civil service workers, and seem to have plenty of corruption that goes along with the extra money and perks, with little accountability. As we see international funding shift from directly funding the PA to the "humanitarian aid" organizations, watch as the NGOs become more and more corrupt and infiltrated with terror supporters themselves.
Unless the international community starts overseeing the NGO budgets, the problem is just moving terror dollars from one pocket to another.
Who is working to give the Palestinian Arabs financial independence?