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      Fayyad Faces Protests Over Austerity Plans

      1,000 Palestinian Authority Arabs march in Hevron in protest of Prime Minister Salam Fayyad’s austerity plans.
      By Elad Benari
      First Publish: 2/5/2012, 6:35 AM

      PA Prime Minister Fayyad
      PA Prime Minister Fayyad
      Flash 90

      About 1,000 Palestinian Authority Arabs marched in Hevron on Saturday in protest of PA Prime Minister Salam Fayyad’s austerity plans.

      AFP reported that in the largest protest to date against economic measures announced last month, the demonstrators chanted, “Salam Fayyad, get out! You are an agent of the United States and Israel.”

      The protesters also carried signs which read “No to a government that brings us poverty and unemployment,” AFP reported. Further south, in Bethlehem, a few dozen people staged a rally as well.

      The protests come after Fayyad announced in early January a number of measures, among them tax hikes and early retirement for civil servants, in a bid to reduce what is forecast as a $1.1 billion (853 million euro) 2012 budget deficit.

      He later said he would put the tax rise on hold until February 15 and “open a dialogue with all institutions and factions,” AFP said.

      In December Fayyad said he plans to drastically reduce his government's reliance on foreign aid next year and hopes to be able to pay for day-to-day operations with local revenues by 2013.

      The decision was spurred by what he described as the Palestinian Authority's worst financial crisis since its inception in the mid-1990s.

      The current financial crisis in Ramallah, which has lasted more than a year, comes amid an ongoing corruption probe that has diminished confidence in Fayyad's administration and a downturn in foreign aid dollars from donor countries.

      The United States temporarily froze some $200 million in aid to Ramallah, leading its senior financial officials to say bankruptcy was on the horizon. Later, Israel struck even deeper by freezing tax revenue transfers to the PA following its acceptance into UNESCO.

      The Netanyahu government later reversed the decision to freeze the tax money, following international pressure.