Government employees in Gaza Strip will not receive salaries this month because of a severe cash drought in Palestinian banks there, Palestinian Prime Minister Salam Fayyad said on Tuesday.

Fayyad said the state would transfer funds to Gaza banks on Wednesday but an Israeli blockade had prevented moving enough cash to the Hamas-run coastal enclave in time to cover salaries of more than 77,000 government employees.

"We are facing a real problem. There is a need for 250 million Israeli shekels ($63 million) to pay the salaries. Now, there are only 47 million shekels ($12 million) in the banks in the Gaza Strip and this is not enough to pay employees," Fayyad told reporters.