Saudis' $1.4bn support for Palestinians now in doubt

Saudi Arabia has so far refused to commit to budget support for the emergency government set up by the Palestinian President Mahmoud Abbas, in a political move casting a shadow over Monday's international donors' conference in Paris.

The kingdom, along with the Gulf states which normally follow its lead, has declined ahead of the conference to promise around half the $1.4bn (700m) a year needed to meet the Ramallah government's annual deficit, according to diplomatic and Palestinian sources. One key reason is thought to be Saudi Arabia's reluctance to be seen to be throwing all its weight behind one of the two parties to the coalition deal which it brokered and which then collapsed in bloody internal conflict and Hamas's seizure of control in Gaza in June.

Palestinian sources are suggesting that this is one reason that of the total of $421m contributed by Arab donors to the Palestinians in budget support so far this year, only around $80m has been paid since June. Saudi Arabia has been the largest single Arab contributor to the Palestinian Authority budget since 2002.

While Western donors mainly the EU and the US have pledged between $700m and $800m, the main Arab donors withheld similar promises at a meeting convened by the French government in Paris.

Palestinian officials and diplomats are predicting the Saudis and the other states in the Gulf Co-operation Council may not decide their stance until the day of the conference to be co-chaired by Tony Blair, the international community's envoy, and opened by the French President Nicolas Sarkozy.