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Palestinian Authority employees in the civilian and security sectors will receive half their salaries for April on Sunday, the finance ministry has said.

The ministry said in a Thursday statement that employees would receive at least 2,000 Israeli shekels ($540), adding that the remainder owed would be distributed when financially possible.

The PA is suffering a financial crisis as Israel continues to withhold tax revenues.

Israeli authorities collect taxes, or clearance revenues, on imports brought to Palestine through Israel, earning a small commission.

During the past year, Israel decided to withhold the value of the money the PA pays to families of killed and detained Palestinians, and demanded the authority not give them funds.

Palestinian finance ministry data indicates the PA has accumulated debts of over $11 billion, owed to employees, local and foreign banks, the pension fund, and service providers in various sectors.

This figure is almost double its general budget.

The PA says the total quantity of tax funds withheld by Israel has reached six billion shekels ($1.61 billion).

The Palestinian finance ministry had also disbursed half of employees' salaries for March.

The government has repeatedly warned of the danger of Israel continuing to withhold tax funds and its resulting inability to meet its obligations to pay employees and make allocations to areas including health and education.

The PA has some power over parts of the occupied West Bank.

US State Department spokesperson Matthew Miller on Thursday said the PA faces funding challenges that make it hard for them to carry out some of the reforms the authority wishes to make.

"It's one of the reasons why we have been pressing Israel to release the clearance revenues that they have been withholding from the Palestinian Authority, because if you want to see a… revitalised Palestinian Authority, it needs to have the money to undertake these reforms," he said at a press briefing.

"It's why we have been pressing them not to take the devastating actions around correspondent banking that they have said they might pursue at the end of this month."

The withholding of tax funds is not the only way Israeli authorities hinder Palestinians financially.

On Thursday, Israel's treatment of Palestinian workers was denounced at a United Nations meeting.

The head of the International Labour Organization (ILO) called for an end to new restrictions blocking Palestinian workers from working in Israel.

Israel's treatment of Palestinian workers, under scrutiny for decades by the UN labour body, has increased since the Israeli war on Gaza with criticism focused on more than half a million job losses and Israel's exclusion of some 200,000 Palestinians from Israel for security reasons.

"This has been the hardest year for Palestinian workers since 1967," ILO Director-General Gilbert Houngbo said.

Labour rights had been "decimated", he said in a speech presenting an ILO report on Palestinian working conditions, while asking Israel to reopen its labour market.

His call was echoed by Palestine's minister of labour, many diplomats from countries including Egypt, and workers' groups.

Israel's delegate Yeela Cytrin blamed the exclusion of Palestinian workers from Israel on Hamas, saying they had targeted commuter routes on and after a 7 October attack on Israel.

Reuters contributed to this report.