Palestinian leader Mahmud Abbas visited Saudi Arabia and met King Abdullah on Friday to seek urgent aid for his administration as the Muslim holy month of Ramadan nears.
The leaders, who met in the Red Sea city of Jeddah, discussed "the financial crisis of the Palestinian Authority (PA) which will no longer be able to pay its employees as Ramadan approaches," the Palestinians' top diplomat in Riyadh said.
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He said they also discussed the stagnant Israeli-Palestinian peace process and Israel's policy of building Jewish settlements on the occupied West Bank and in annexed east Jerusalem, a major obstacle to a resumption of peace negotiations.
The PA's debts have climbed to $1.5 billion, said Shobaki who, citing statistics from prime minister Salam Fayyad's government, estimated $500 million was needed in urgent aid to tackle the current crisis.
The Authority faces its worst financial crisis since it was founded in 1994, Palestinian labour minister Ahmed Majdalani said at the start of July, warning that donor countries were not honouring their pledges.
Arab and other states have pledged around one billion dollars, of which the PA has received only $480 million, according to finance minister Nabil Qassis.