Israel grabs $100m of taxes from Palestinians in protest

The Palestinian Prime Minister said yesterday that Israel's seizure of millions of dollars of taxes had left him unable to pay the salaries of 160,000 government workers.

Salam Fayyad said his government was in a "very difficult financial situation". Israel collects $100m in customs and other taxes for the Palestinians each month – nearly half of the Palestinian government's income. The rest comes from local taxes and Western aid.

Israel is withholding the funds in protest at a reconciliation deal between Mr Fayyad's Western-leaning government and the Islamic Hamas government in Gaza.