RAMALLAH, West Bank, May 1 (Reuters) - Palestinian Finance Minister Salam Fayyad told union leaders on Tuesday he would pay at least half salaries to government workers, but not their full wages, because a year-old Western aid embargo remained in place.

Fayyad said the first partial payments would be made next week, government employees' union chief Bassam Zakarneh told Reuters after the meeting in the West Bank city of Ramallah.

Government workers have not received full wages from the Palestinian government since Hamas Islamists came to power in March 2006.

Western powers responded by cutting direct aid to the Palestinian Authority to press Hamas, which won a parliamentary election that January, to recognise Israel, renounce violence and abide by interim peace deals.

"He (Fayyad) told us that the government will be able to pay at least half the salary. He told us this is all that the government can do," Zakarneh said.

Union leaders have threatened a new round of work stoppages to demand full wages and back pay.

"There will be a strike for a few days during each month until our salaries are paid," Zakarneh said.

Workers will stage a one-day strike on Wednesday after hundreds of public school teachers took part in a one-day strike on Monday.

Hamas formed a unity government in March with President Mahmoud Abbas's secular Fatah faction in a bid to end internal fighting and ease the embargo.

Prime Minister Ismail Haniyeh of Hamas met on Tuesday in the Gaza Strip with a delegation from the European parliament in what he called a "step towards breaking the political and economic siege" against the unity government.

But tensions between Hamas and Fatah remain high and the Western aid ban on the Palestinian Authority remains in place.

Fayyad is counting on receiving at least $55 million a month from Arab League members to cover about half of the Palestinian Authority's monthly payroll.

Fayyad's payments would be timed to coincide with "allowances" paid to workers through a European aid programme known as the Temporary International Mechanism. The European payments are expected to total up to $34 million a month.

Deputy Palestinian Prime Minister Azzam al-Ahmad, a Fatah leader, said on Monday the unity government should be disbanded if the Western embargo is not lifted within three months.

Despite appeals from Fayyad and Abbas, the European Union's aid commissioner said last week EU aid would continue to bypass the Palestinian government until it recognises Israel, renounces violence and abides by interim peace deals as demanded by the Quartet of Middle East mediators and Israel.

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