Palestinian Authority officials are confident Israeli Prime Minister Binyamin Netanyahu's decision to freeze tax revenue transfers to Ramallah will be short lived.
The decision, which came in the wake of UNESCO's admission of the PA to its ranks as a full member, was hailed in Israel as a long-overdue sign of strength from the Netanyahu government.
Israel's decision to cut of tax revenue transfers would deprive the PA of about $100 million, officials say.
As Arab governments busy themselves with internal concerns amid the Arab Spring and revolutions in five countries to date, the PA is unlikely to find economic assistance within the region.
Combined with a now-ended aid freeze of some $200 million in US aid dollars Israel had the ability to force a PA collapse, analysts said, noting senior PA economic advisors' warnings that fiscal ruin was at hand.
However, according to the PA official Israel will not allow the PA to fall apart fearing Hamas would take its place.
The official cited pressure from the Netanyahu government on US lawmakers to keep monies flowing to the PA, adding a resumption of Israeli funds could not be far behind.