Banks in the isolated Palestinian enclave stopped issuing cash a week ago amid shortage of currency to pay salaries. In October, Israel stopped cash transfer to Gaza as part of a larger blockade imposed on the enclave when rocket attacks on the Jewish state resumed in breach of a ceasefire deal.
Israeli Defense Minister Ehud Barak approved on Wednesday the transfer of 100 million shekels ($25 million) in cash from banks in the West Bank into the Hamas-controlled Gaza Strip to prevent a collapse of the banking system.
The decision came in response to a "personal appeal" from Salaam Fayyad, the prime minister of the internationally recognized Fatah government in the West Bank, and the head of the Bank of Israel, Stanley Fischer.
The money will go mainly to people employed in the public sector prior to the radical Hamas movement's takeover of the Gaza Strip from Fatah in June 2007. A total of 77,000 Gaza residents still receive their monthly payments from the West Bank through the banking system.
Around 20,000 civil servants employed by the Hamas government have been largely unaffected by the cash freeze.
