The European Union says it hopes to begin aid payments directly to the largely-impoverished Palestinian population by June.
Speaking Monday in Brussels, EU External Affairs Commissioner Benita Ferrero-Waldner said details of the new funding system, which would by-pass the Palestinian government, have not been worked out.
But she said she hopes the EU can present a proposal next week at a meeting with envoys from other donor countries.
The Palestinian Authority is said to require about $150 million a month to meet payroll needs and administrative costs.
About two-thirds of the money has come from the European Union, which cut funding last month after the Hamas-led Palestinian government repeatedly refused to renounce violence and recognize Israel.
Both Israel and the United States have also cut funding, leaving 165,000 Palestinian police and security officers without pay since February.Some information for this report was provided by AFP and Reuters.