The European Union said on Friday it would provide an extra 85 million euros (124 million dollars) to the Palestinian Authority to help pay salaries of essential workers and to support vulnerable families.

According to Reuters, the move was decided on after Israel on Sunday blocked the transfer of 105 million dollars in customs duties and other levies it collects on behalf of the Palestinian Authority, following a deal to reunite the two rival Palestinian groups Hamas and Fatah.

Open gallery view Palestinian Prime Minister Salam Fayyad greets EU's High Representative for Foreign Affairs and Security Policy Catherine Ashton in Ramallah July 17, 2010. Credit: Reuters

But an EU spokesperson told Haaretz that the move was not connected in any way to Israel's blocking of the transfer of customs duties. The spokesperson said that the payment was part of a regular series of payments planned in advance.

Israel has explained the withholding of funds, saying it refuses to let revenues flow to Hamas.

A European Commission statement said the EU funds were being advanced under an accelerated procedure at the request of Palestinian Prime Minister Salam Fayyad to meet urgent financial needs.

The statement said 45 million euros would go toward salaries and pensions of vital workers, mainly doctors, nurses and teachers. A further 40 million would go to social allowances for vulnerable Palestinian families.

"It is important that access to essential public services remains uninterrupted and the right to social services is respected," EU foreign policy chief Catherine Ashton said.

The EU funds are in addition to 100 million euros already approved for 2011.

The money will be channeled through an EU mechanism which has provided 762 million euros in aid to the Palestinian Authority since 2008, in addition to 276 million from EU states.

Palestinians see reconciliation between the secular Fatah and Islamist Hamas as crucial for their drive for an independent state in Gaza and the West Bank. The two groups had been at odds since a brief civil war in 2007, after which Hamas seized control in Gaza, and Fatah was left to administer the West Bank.

Israel has condemned the unity pact as a "tremendous blow to peace", with Netanyahu refusing to negotiate with Hamas, whose charter calls for Israel's destruction.

