Haniyeh: Palestinian government broke

Prime Minister Ismail Haniyeh told the first full meeting of his Hamas-led cabinet on Wednesday that the Palestinian government was broke and urged the international community not to slash aid.

"The Ministry of Finance has inherited an entirely empty treasury, in addition to the debts of the ministry and the government in general," said Haniyeh.

The government is facing Western isolation and cuts in aid to the new administration unless it recognizes Israel, renounces violence and accepts interim peace accords.

Haniyeh said the government would do its best to pay salaries to the Palestinian Authority's 140,000 employees despite a cash crunch caused in large part by cuts in Israeli tax revenue transfers following Hamas' election win in January.

Hamas has previously expressed confidence it would make up for any cash shortfalls with aid from Iran and other Muslim nations. Haniyeh gave no figures on the Authority's debts.

Effort to pay salaries

Speaking by video-link with ministers in the West Bank city of Ramallah because of Israeli travel curbs on senior Hamas officials, Haniyeh said he wanted government employees to get their salaries before ministers in the cabinet.

March wages were supposed to be paid earlier this week.

Haniyeh also condemned recent Israeli air strikes and shelling in the Gaza Strip.

Haniyeh said the new government would work with Arab countries and other donors to meet "the needs of our people" by paying salaries and creating jobs. He offered few details.