The office of Palestinian Authority Prime Minister Salam Fayyad denied reports in Israel that U.S. Secretary of State Hillary Clinton threatened Fayyad over the PA's intention to appeal to the UN in September.
The reports claimed that the U.S. threatened to cut off the funding it gives the PA if it asks the UN to recognize a state of "Palestine" in September.
A Fayyad spokesman said that the phone conversation between Clinton and Fayyad centered upon the financial crisis in the PA, and the need for donor states to back up their promises and supply the PA with cash.
The talk was "very friendly," the spokesman said.
The PA has a serious shortage of cash and its deficit is estimated at over 500 million dollars. Donor states reduced the amount of money they intend to give the PA and failed to transfer funds that they had promised. As a result, the PA has paid its employees only half of their salary.