The Palestinian Authority has said the Israeli finance ministry was continuing to withhold tax revenues and as a result, only a part of public sector salaries would be paid this week, keeping up a squeeze on payrolls that has lasted for months, Reuters reports.

The Authority said it would pay Palestinian public sector employees 50 per cent of their March salaries on Tuesday after Israel withheld a transfer due for April.

It said the arrears would be paid once the financial situation allowed.

The Israeli finance ministry confirmed it had been decided not to transfer tax revenues this month but declined to provide details.

Israel collects tax on goods that pass through Israel into the West Bank on behalf of the Palestinian Authority and transfers the revenue to Ramallah under a longstanding arrangement between the two sides.