By Noah Browning
RAMALLAH, West Bank, Jan 15 (Reuters) - Hundreds of Palestinian government workers protested outside their prime minister's office on Tuesday saying they had not received a full salary in almost three months amid a deepening financial crisis.
A cash shortfall in the Palestinian Authority worsened after Israel imposed sanctions following the West Bank government's successful bid to gain de-facto recognition of Palestine as a state at the U.N. General Assembly in November.
The demonstration in downtown Ramallah was the latest in a series of sporadically violent protests over cuts and tough austerity measures in the Israel-occupied West Bank.
"How can the world agree to this policy of collective punishment when our only crime was heading to the United Nations," said the head of Government Employees' Union, Bassam Zakarneh, at the protest.
"Our government did not plan for this rainy day, and we think that it has not found any way to deal with this crisis."
Deprived of potentially lucrative land and infrastructure by Israeli restrictions and Jewish settlements, the West Bank's economy depends on foreign aid.
But from a high of $1.8 billion in 2008, foreign aid plummeted to around $600 million last year, according to the Palestinian Monetary Authority.
Despite the shortfalls, hiring has continued to rise in the Palestinian Authority's swollen public sector, and efforts to improve tax and utility bill collections have only increased the public anger.
Anti-austerity protests in September descended into violent clashes with police and calls for the downfall of the government. Israeli officials have said a third Palestinian Intifada (uprising) may be in the offing.
The West Bank was captured by Israel in the 1967 Middle East War. Palestinians hope to make a future state in Gaza, the West Bank and East Jerusalem.
NO "SAFETY NET"
Frustrated Palestinian officials said Arab countries had failed to deliver a $100 million monthly "safety net" promised before the U.N. statehood move and accused Washington of pressing its Gulf allies not to pay.
"The U.S. administration made clear threats before our moves at the U.N. that our success would mean a political and financial siege on Palestine and its people," said Wasel Abu Yousef, a leader in the Palestine Liberation Organization (PLO).
"The Americans are pressuring Arab countries, and (the) strategy goes hand-in-hand with the piracy being conducted by the Israeli government on our funds," he told Reuters.
The U.S. consulate in Jerusalem did not immediately respond to a request for comment.
Around $200 million in U.S. budget assistance pledged by Washington in 2012 has been held up by Congress which is opposed to Palestinian moves that it says undermines Israel's security.
Israel controls entry and exit points in the occupied West Bank and has repeatedly withheld customs duties it collects on the Palestinians' behalf, a main source of government revenue, in response to Palestinian political moves it opposes.
Israel said in December it was retaining the dues to cover millions of dollars of unpaid bills with local utility firms.
"(Arab countries) know the depth of the crisis that will engulf us if their policy of not helping a brotherly country persists," Palestinian President Mahmoud Abbas said on a visit to Tunis on Monday. (Reporting By Noah Browning and Jihan Abdalla; Editing by Andrew Heavens)