The Palestinian Authority government announced Wednesday that it would pay its employees half of their salaries next week.
The announcement came as PA civil servants began a two-day strike to protest against the government's failure to pay last month's salaries.
PA Finance Minister Nabil Qassis said the government has asked local banks for loans so that it could pay the salaries.
The PA is hoping that the banks would agree to give it a short-term loan of $100m. to help solve the severe financial crisis.
The PA government already owns the banks $1.2b.
PA officials expressed hope that the Arab countries would fulfill their pledge to provide the Palestinians with $100m. each month following Israel's decision to withhold tax and customs revenues belonging to the Ramallah-based government.
The officials said they were hoping that the emir of Qatar, Hamad bin Khalifa al-Thani, who is expected to visit Ramallah before the end of this month, would help the PA solve its financial crisis.
Around 50,000 workers took part in Wednesday's stoppage. West Bank security forces and staff in the Gaza Strip did not participate.
"This strike is against Israel's piracy," said Bassam Zakarneh, chief of the government employees' union.
"The situation is very grave and the services to the people are much reduced by the strike," he said. "(People) can't even afford transportation to their workplaces."
Government workers last received salaries for October, which were payed belatedly at the end of November. There was no word on when November or December wages would be handed over.
Strikes and protests over austerity measures turned violent in September. Demonstrators pelted security forces with rocks and called for the ousting of PA Prime Minister Salam Fayyad and President Mahmoud Abbas.
Wednesday's action appeared much more subdued and there were no public protests, with Palestinians blaming Israel rather than their own government for their economic woes.
"This puts about a million citizens in Palestine in the cycle of poverty," said Fayyad, speaking of the Israeli sanctions.
"We're talking about doubling the rate of poverty in Palestine during a maximum period of two months from today if the situation continues as it is," he told Reuters on Monday.
Please LIKE our Facebook page - it makes us stronger: