The union of civil servants in the West Bank on Sunday called for an open strike to begin Tuesday in protest over the late payment of salaries.
Union chief Bassam Zakarna dismissed the Palestinian Authority's claims that it could not pay employees' wages on time because of a financial crisis.
"This financial crisis is made up, and the government adopts a policy of blackout to frustrate employees and citizens while the treasury has enough money to pay full salaries," Zakarna said in a statement.
Palestinian Authority Prime Minister and Finance Minister Salam Fayyad said Tuesday that the government needed $300 million "urgently" to help ease a cash crisis.
Speaking at an extraordinary meeting of Arab League representatives, Fayyad said the crisis stemmed from the fact that pledged aid had not materialized.
Palestinian Authority Foreign Minister Riyad Al-Malki told AFP that President Mahmoud Abbas had requested the meeting as the PA faced the possibility of being unable to pay the salaries of its employees for July or August.
Zakarna said Fayyad was "trying tactics" as shops were forced to close and the country's economy was "collapsing."
The union leader said government employees were not able to buy goods for the holy month of Ramadan, which begins Monday, and could not pay for their children's university applications.
If the PA starts to see strikes and anti-government demonstrations in August - which Hamas may very well help organize and encourage - it would make the statehood bid at the UN look like a joke. And Ramadan protests, with hungry people in the heat of the summer demanding their money, seem likely to flare up into violence, which would be even more embarrassing before any UN bid.
The PA is by far the largest employer in the West Bank, so if the government workers aren't paid the entire economy very possibly would collapse.
Interestingly, although Fayyad managed to get the Arab League to meet about the PA's financial troubles, I have not seen any indication that any money was actually forthcoming.
Is it possible that Arab leaders are not really keen on this whole unilateral statehood stunt and are trying to undermine it by withholding promised funds? I haven't seen much enthusiasm for the idea in the mainstream Arabic press. This sounds like the type of passive-aggressive move that Arab leaders have used in the past, as they mouth words of support for "Palestine" but do little to help.