Paris ? French President Jacques Chirac proposed on Friday the creation of a World Bank fund to pay the 165,000 Palestinian Authority employees living without wages since an international freeze on aid.

The idea, intended to help needy Palestinians without rewarding their militant Hamas government, is part of quickening European efforts to solve the dilemma as the Palestinians’ plight grows more dire.

The United States and the 25-nation European Union, which includes France, this month cut off direct aid to the Palestinian Authority because the Islamic Hamas movement heading it refuses to recognize Israel or renounce violence.

The Palestinian Authority last paid employees’ salaries in mid-March, before the Hamas-led government was sworn in.

Chirac made the proposal during a meeting Friday with moderate Palestinian President Mahmoud Abbas in Paris, said the French president’s spokesman, Jerome Bonnafont.