"The PA's fiscal situation is extremely difficult, and it is facing an number of crises," Shtayyeh told The Anadolu Agency.
"Among those crises is Israel's decision to withhold Palestinian tax revenues, which account for 70 percent of civil servants' payroll," he said.
"There is also a major shortage in the Gaza reconstruction funds, from which we only received two percent.
"The PA is on the verge of collapse, and if the situation remains unchanged, we might not find fuel to police cars and public security," he added.
He even went as far as warning that Israel would end up "paying a hefty price" if the PA collapsed.
Yet, Shtayyeh ruled out that the international community would allow the downfall of the PA, but said that Israeli Prime Minister Benjamin Netanyahu "doesn't want to listen to anyone."
"Netanyahu exploits the issue of Palestinian tax revenues for his political campaign, and Israel exercises collective punishment in order to lower the ceiling of Palestinian political demands," he added.
Israel collects around $175 million every month in taxes on Palestinian imports and exports on behalf of the PA and transfers them after deducting a three-percent service charge.
In early January, the Israeli government decided to block the transfer of tax revenues owed to the Palestinian Authority in retaliation of its decision to join the International Criminal Court (ICC) to pursue war crimes charges.
The Palestinian government was only able to pay 60 percent of last month's payroll after borrowing from local banks as Israel continues to withhold the tax revenues - the PA's main source of income.
Shtayyeh stressed that Palestinian side will proceed with a lawsuit against Israel in the ICC on the first of April in spite of the considerable pressure it is under.
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