Palestinian Authority Prime Minister Ismail Haniyeh declared on Friday that his embattled Hamas-led government had no intention of stepping down, despite a sweeping civil service strike and an economic crisis that a top UN official said has brought the Gaza Strip to a "point of near meltdown." Hamas' takeover of the Palestinian Authority in March has provoked crushing international sanctions that have rendered the government unable to pay its 165,000 employees for the past six months. In the widest sign of growing displeasure with Hamas, tens of thousands of teachers, health workers and other government employees launched an open-ended strike last Saturday. The work stoppage, organized in large part by the rival Fatah movement, has threatened to bring down the government. "The government is not going to resign," Haniyeh told 2,000 worshippers at a mosque in the southern Gaza town of Rafah. "We have no thoughts of resignation or dismantling the (Palestinian) Authority." In New York, Karen AbuZayd, the head of the UN agency for Palestinian refugees, said conditions in Gaza have reached a breaking point. Yet instead of forcing Hamas to moderate, the tough policies have made the Palestinians more intransigent, she said. "Strangulation of commerce and trade has ruined the economy, brought institutions of government to a point of near meltdown and badly shaken the society," she said. "These pressure tactics have not resulted in a desire for compromise but rather have created mass despair, anger and a sense of hopelessness and abandonment." She called on the international community to provide Gaza with a peacekeeping force or observer mission, saying Gaza's 1.4 million people deserve protection. "It would be great to have an international presence, civilian, military, whatever," she said. AbuZayd pointed to the success of the European Union's observers at the Rafah crossing along Gaza's border with Egypt. The crossing was opened under the control of the Palestinians last fall, and worked smoothly until the Israelis effectively closed it after the kidnapping of the soldier. The foreign ministers of Italy and Russia both endorsed the idea of an international presence in Gaza during current trips to the region. But Israel has long opposed such a force, citing security concerns.