Sweden will give the Palestinian Authority 50 million kronor (€4.8 million, $6.9 million) in aid to help pay wages and pensions to civilians, the government said.

"A functioning Palestinian Authority is a prerequisite for a peaceful and sustainable solution to the Israeli-Palestinian conflict," International Development Cooperation Minister Gunilla Carlsson said in a statement.

"The Palestinian Authority is in a very difficult economic situation," she added.

Sweden's total support to the Palestinians is expected to exceed 700 million kronor this year.

Stockholm disbursed 4.73 billion dollars (3.3 billion euros) in development aid last year, or almost one percent of its gross domestic product, making it the world's most generous donor, according to the Organisation for Economic Cooperation and Development (OECD).