Israel has withheld some $50 million monthly from the PNA to boycott the radical Islamist group Hamas, considered a terrorist organization by Israel and the United States, which won parliamentary elections in January 2006.
The Israeli newspaper Haaretz quoted political sources in Jerusalem as saying that Abbas' announcement that he would form a new Cabinet to replace the current government, in which power has been shared since March by Hamas and his moderate Fatah party, had removed obstacles to the transfer.
The president declared a state of emergency and dissolved the government Thursday after six days of bloody gun battles between the warring factions left Hamas fighters in control of Gaza.
Israel, which has refused any contacts with the Islamists, is also to decide on further actions against the 1.3 million-strong Palestinian exclave, heavily dependent on fresh water and electricity supplies from Israel and humanitarian and commercial cargoes transiting the Jewish state.
The latest developments in Gaza have provoked international alarm, with the possibility of violence spreading to the West Bank and the strong likelihood that the Palestinian territories will undergo a permanent split into an isolated Hamas-led Islamic state in Gaza and a Fatah-led state in the West Bank, with Western backing.
The European Union has meanwhile suspended its remaining aid projects in Gaza.
