msnbc.com news services
updated 12/8/2004 11:33:28 AM ET 2004-12-08T16:33:28

The U.S. government has pledged $20 million to help boost the Palestinian economy, attendees at a donors conference in the Norwegian capital said Wednesday.

Palestinian Labor Minister Ghassan Khatib said the money was earmarked for the Palestinian Authority's budget support.

"Now there seems to be wide recognition at this conference of the urgent needs of the Palestinian Authority for immediate financial support," Khatib said.

The Palestinian Authority is facing a severe financial crisis due to falling tax revenues during four years of violence that has paralyzed the Palestinian economy.

The aid is part of a push to help the Palestinians before a Jan. 9 election in which President Bush hopes the Palestinians will elect a democratic leader willing to negotiate peace with Israel.

“The upcoming Palestinian elections have made a functioning Palestinian Authority more important than ever,” said a U.S. official who spoke with Reuters on condition of anonymity.

“The United States has a national security interest in helping to end the ongoing violence and terror in the Middle East and to make progress toward the president’s June 24, 2002, vision of peace.”

Israeli and Palestinian officials have been meeting in Oslo since Tuesday with the World Bank and other donor countries with regard to increasing the international funding that has helped the authority operate.

The Bush administration administration official said the United States hoped its pledge would encourage additional donations from other countries.

The Associated Press and Reuters contributed to this report.

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