(Bloomberg) -- The Palestinian Authority said it will make a special salary payment to government staff after reaching an agreement with Israel that means it has more money to spend.

An Israeli official confirmed a deal had been struck that included Israel transferring some funds starting next week. The authority said on Thursday employees would receive 60% of their August salaries plus what they are still owed from the month of February.

Palestinians’ financial plight worsened earlier this year when Israel began withholding about $11 million a month, or roughly 5% of what it collects in tax for the authority. The Israeli government said the money was being used to pay stipends to families of Palestinians shot dead by Israeli security forces -- some after they had killed Israeli citizens -- or to families of those held in Israeli prisons.

Palestinian officials, who describe the payments as welfare for families whose relatives are in jail, refused to accept any funds unless they received the taxes in full.

Attacks against Israelis have intensified in recent weeks, leading to suggestions they were linked to increased desperation among Palestinians. The daily Haaretz reported this week that security agencies were increasingly concerned over an outbreak of violence before Israel’s Sept. 17 election.

To contact the reporters on this story: Gwen Ackerman in Jerusalem at gackerman@bloomberg.net;Fadwa Hodali in Ramallah at fhodali@bloomberg.net

To contact the editors responsible for this story: Riad Hamade at rhamade@bloomberg.net, Mark Williams, Gwen Ackerman

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