The European Commission Friday announced the approval of a $121.85 million financial package for the Palestinian Authority, said to be for the salaries and pensions of PA civil servants.

The decision comes as Israel continues to withhold tax revenues paid by Palestinians for goods imported into Palestinian areas, which are due under agreement for transfer to the PA. The EU package was in addition to the $143.35 million already approved from European Neighborhood and Partnership Instrument.

EU foreign affairs chief Catherine Ashton said " It is important that access to essential public services remains uninterrupted and the right to social services is respected. I would like to reiterate that we are following closely the political developments, and encourage the strive for dignity, prosperity and stability across the region."

The EU's Commissioner ?tefan Füle noted in a statement, "With this decision, the Commission is demonstrating again its indefatigable support to the Palestinian people. The money, which will be provided through the PEGASE mechanism, will be used to pay the salaries and pensions of Palestinian Authority employees," and called on EU member states to continue their support of the Palestinian government.

Israel announced that it would withhold tax revenues when Palestinian factions prepared to sign a unity agreement in Cairo. Israeli officials announced that they wanted to make sure "not one shekel" of the Palestinian tax money would reach Hamas.

Leaders also called on President Mahmoud Abbas to abort the reconciliation deal, saying it would quash already dead peace negotiations.