Palestinian Statehood Bid at UN May Aggravate Economic Woes

Palestinians, mired in a financial crisis that forced an emergency 50 percent cut in public salaries, may find that pursuing statehood at the United Nations next month puts them in a worse condition.

Israel, which opposes the UN bid without a return first to peace talks, collects about $1.2 billion in fees each year for the Palestinian Authority. It has withheld the money in the past during disputes and to pressure the Palestinians. Both the U.S. House and Senate have called on President Barack Obama to reduce the Palestinians’ annual $500 million in foreign aid if they proceed at the UN’s September meeting.