A cash shortfall in the Palestinian Authority worsened after Israel imposed sanctions following the West Bank government's successful bid to gain de-facto recognition of Palestine as a state at the U.N. General Assembly in November.
The demonstration in downtown Ramallah was the latest in a series of sporadically violent protests over cuts and tough austerity measures in the Israel-occupied West Bank.
Protesting alongside the government workers were farmers who had not received their subsidies since the government began searching for ways to plug a hole in its finances.
“We want support for the grazing animals, the agriculture and the farmers, and to lower the prices of seeds for us,” said a farmer from Bani Naeem.
Deprived of potentially lucrative land and infrastructure by Israeli restrictions and Jewish settlements, the West Bank's economy depends on foreign aid.
'A government can liberate a worker, it cannot liberate a settlement' read a banner raised by two elderly men at the protest.
From a high of $1.8 billion U.S din 2008, foreign aid plummeted to around
600 million last year, according to the Palestinian Monetary Authority.
Despite the shortfalls, hiring has continued to rise in the Palestinian Authority's swollen public sector, and efforts to improve tax and utility bill collections have only increased the public anger.
“The salary is based on the steadfastness of this sector of the Palestinian people. Giving salaries means supporting these people, the merchants, the manufacturers and the private sector. When you insert $120 million U.S. into the country, it means you will make this country work. The salary of a government worker will make the country work,” said Ministry of Economy employee Reem Najjar.
The day after the protest, market vendors in central Ramallah complained about plummeting sales as a result of the unpaid government salaries.
“The economic situation is not good since there are no salaries. The employees are delayed and then only received half a salary a month late. We are simply waiting for the employees to get their salary. The entire economy is suffering,” said trader Mohammad Hamad.
“The economy is dead, there is no movement whatsoever. The people don't have money. We've got goods, but there is no money. Employees have not even received their salaries yet. There is no money, if the employees would get paid then you would have some sales, some buying, something," said Mohamad Jabareen, another market vendor.
Frustrated Palestinian officials said Arab countries had failed to deliver a $100 million monthly safety; promised before the U.N. statehood move and accused Washington of pressing its Gulf allies not to pay.
Around $200 million in U.S. budget assistance pledged by Washington in 2012 has been held up by Congress which is opposed to Palestinian moves that it says undermines Israel's security.
Israel controls entry and exit points in the occupied West Bank and has repeatedly withheld customs duties it collects on the Palestinians' behalf, a main source of government revenue, in response to Palestinian political moves it opposes.
Israel said in December it was retaining the dues to cover millions of dollars of unpaid bills with local utility firms.