The bloodshed in Gaza threatens to keep badly needed economic aid from the Palestinians who already suffer from rising unemployment and a lack of basic services, a UN official aiding Palestinians warned Saturday. "In today's circumstances - the infighting in Gaza - it's extremely difficult to make the case for a public appeal for the Palestinians," Peter Ford, the UN Relief and Works Agency's (UNRWA) top fundraiser told participants at the World Economic Forum meeting at the shores of the Dead Sea. "What is happening in Gaza and to a lesser extent, the West Bank, today is impacting the readiness of Arab publics to give," Ford said. Spiraling violence between rivals Fatah and Hamas in the Gaza Strip has killed more than 50 Palestinians and wounded dozens of others in the past week. The clashes have all but destroyed a coalition deal between the two rivals, raising the specter of an all-out civil war. Israel has also vowed not to let up in its airstrikes against the militants in Gaza who have been firing rockets on Israeli border towns. Ford called UNRWA's budget for this year "disappointing" at US $350 million because it was not an increase over 2006, despite escalating burdens on the US agency due to inflation, the decline of the US dollar and rising Palestinian unemployment. The UN official said his agency's budget is spent not just on Palestinians in the West Bank and Gaza but also on Palestinian refugees in Jordan, Lebanon and Syria. He said the situation has reached a point where there are 50 students to a classroom and doctors must see 90 patients a day. "Imagine the impact of that on the standard of service we can give to the refugees. Look at the unhygienic conditions in many of the camps. We simply can't afford to put it right," he added. But Ford said he was most concerned that UNRWA had to cut its job creation program in the Palestinian territories. "Gaza needs that like a 'hole in the head,'" Ford said. "This is a result of us not being given enough funds for our emergency program to create jobs." Palestinian Finance Minister Salam Fayyad, who participated on the same panel session discussing the dangers of donor apathy, said the problem was most acute in Gaza where unemployment and disillusionment were at an all-time high. "There is no possibility for normal economic life until the current system of closure that is in place ends," Fayyad said, referring to the international aid embargo by key donors, including the US and the UN, imposed on the Palestinian government because it includes Hamas. The donors have demanded Hamas recognize Israel, renounce violence and commit to past agreements before aid is restored. Hamas has rejected their demands. The European Union recently announced that it was close to setting up a new Palestinian fund to allow donors like itself to send aid while formally maintaining the Hamas boycott. The new fund would be run and managed by Fayyad, who is considered by the EU, the United States and others as a moderate. Danish Prime Minister Anders Fogh Rasmussen told the Dead Sea meeting that while aid shouldn't be separated from politics, exceptions had to be made in cases of humanitarian disaster. He said the EU provided Euro 650 million (US$878 million) to the Palestinian Authority last year.