PALESTINIAN BANKS SAID ON SUNDAY THEY WOULD PROVIDE INTEREST-FREE LOANS TO SOME 40,000 PALESTINIAN GOVERNMENT EMPLOYEES IN A MOVE TO ALLEVIATE AN ECONOMIC CRISIS AND AVOID INTERNATIONAL SANCTIONS. "WE ARE READY TO LOSE MILLIONS OF DOLLARS BUT NOT TO RISK OUR RELATIONSHIP WITH U.S. BANKS AND RISK INTERNATIONAL SANCTIONS," A BANKING OFFICIAL SAID ABOUT THE ARRANGEMENT, WHICH AVOIDS DEALING DIRECTLY WITH THE HAMAS-LED GOVERNMENT. EARLIER ON SUNDAY, FOUR ARMED PALESTINIAN FACTIONS THREATENED LOCAL BANKS SAYING IT WAS THEIR NATIONAL DUTY TO HELP PAY OUT THE SALARIES AND ASSIST THE PALESTINIAN PEOPLE. THE BANKS SAID THEY WOULD PROVIDE THE LOANS FIRST TO THOSE EARNING 1,500 SHEKELS A MONTH ($325) OR LESS AND POTENTIALLY EXPAND THE SCHEME TO OTHER, HIGHER-SALARY EMPLOYEES LATER. A TOTAL OF 165,000 PEOPLE ARE EMPLOYED BY THE GOVERNMENT. THE LOANS ARE EXPECTED TO BEGIN BEING EXTENDED FROM MONDAY AND ARE DUE TO COVER ONE MONTH'S SALARY. THE MOVE IS EXPECTED TO COST THE BANKS ABOUT $13 MILLION, REUTERS REPORTED.
