(Adds EU statement)

By Mohammed Assadi

RAMALLAH, West Bank, Aug 20 (Reuters) - The European Union gave a financial boost on Wednesday to the cash-strapped Palestinian Authority to help Prime Minister Salam Fayyad pay public sector salaries.

The 40 million euro ($59 million) injection of funds comes on top of the 440 million euros ($648 million) that the EU pledged for the Palestinians in 2008.

Fayyad has struggled in recent months to pay government workers because many Arab donors have not met their financial commitments. "The situation is very, very tight, for sure," a top official from Fayyad's office said this week.

A Palestinian official said the EU money would help Fayyad meet the next government payroll, due in the first week of September. Fayyad has been waiting for months to receive $80 million pledged by Kuwait but it is unclear when the funds will arrive in the Palestinian Authority's coffers, officials say.

The EU money will also be used to pay Palestinian retirees and poor families, and to provide fuel to Gaza's lone power plant, according to an EU statement.

In Brussels, Benita Ferrero-Waldner, European Commissioner for External Relations, urged other donors to make good on their pledges to the Palestinians. "If not, the situation of the Palestinian Authority will continue to be precarious," she said.

Salaries were paid several days late earlier this month but only after Fayyad secured a financial pledge from a telecommunications company seeking to speed its entry into the Palestinian market, as well as a short-term bridge loan.

At a conference in Paris in December, donors pledges $7.7 billion in aid to the Palestinians over three years.

But only a fraction of that has materialised and most of it is earmarked for projects and not general spending. Fayyad wants more allocations to budget support.

Delays in paying salaries would be embarrassing for Fayyad, who was appointed last year with Western backing when President Mahmoud Abbas fired a Hamas government after the Islamists violently took over Gaza Strip after routing his forces there. (Additional reporting by Adam Entous in Jerusalem and David Brunnstrom in Brussels) (Editing by Sami Aboudi)

AlertNet news is provided by