Palestinian PM says 40,000 government workers will receive some of their wages this weekend

(AP) Palestinian Prime Minister Ismail Haniyeh of Hamas said Friday that 40,000 government employees would receive some of their overdue wages this weekend, and that the remaining 125,000 would receive advances.

Hamas hasn't paid 165,000 civil servants since it took power in March because its refusal to renounce violence and recognize Israel has provoked crippling international economic sanctions. The unpaid salaries have been a major source of ferment in Palestinian territories and have threatened the viability of the new Hamas government.

In a sermon at a mosque in the Nusseirat refugee camp in central Gaza, Haniyeh said the government came up with the cash for one month's wages because of "internal revenue collection ... and some good financial management."

Employees earning up to $330 a month will receive full salaries, and those who make more will receive advances, he said.

The money will be deposited in Palestinian banks on Saturday or Sunday, Haniyeh said.

Arab states have pledged tens of millions of dollars to help the Palestinian government cover its $160 million tab for monthly payroll and operating costs. But Arab banks have refused to transfer the money for fear of running afoul of U.S. anti-terror laws, because Washington considers Hamas to be a terrorist group.

"Some people told the Americans to withhold money from the Palestinian people and to impose a siege on the Palestinian government, thinking that the government would collapse in two or three months," Haniyeh said in his sermon.

"We say, with God on our side and with faith in our people, the legitimate and elected government will not collapse. ... It will continue on its path and remain committed to its program."

For all that, the unpaid salaries have destabilized the Palestinian territories, particularly by provoking unrest among the tens of thousands of security officers who are loyal to Palestinian President Mahmoud Abbas of the rival Fatah party.

On Thursday, about 3,000 police officers joined a protest over unpaid wages, firing in the air outside the parliament building in Gaza City and smashing windows.

Since Hamas swept January parliamentary elections, Abbas has been working to try to maintain the Palestinian government's legitimacy in the eyes of the international community. He has given Hamas until the middle of next week to decide whether to accept the idea of a Palestinian state alongside Israel _ a move that would imply recognition of the Jewish state.

Foreign Minister Mahmoud Zahar, a Hamas hard-liner, said during a visit to China on Thursday that he opposes a two-state solution to the Mideast conflict. But other Hamas politicians have signaled willingness to go along with Abbas.

On Friday, Haniyeh said the proposed two-state program would need to be amended to become a "national consensus document."

Abbas hopes to restart peace talks with Israel, but Israeli Prime Minister Ehud Olmert says that is unlikely until Hamas becomes more moderate.

Olmert is expected to hold a first meeting with Abbas at the end of June and explore whether it is possible to resume peace talks. On Sunday, Olmert is due to travel to Egypt to meet with President Hosni Mubarak to lay the groundwork for such talks.