RAMALLAH, West Bank, Dec 2 (Reuters) - Government employees in the Gaza Strip will not receive salaries this month because of a severe cash drought in Palestinian banks there, Palestinian Prime Minister Salam Fayyad said on Tuesday.

Fayyad said the state would transfer funds to Gaza banks on Wednesday but an Israeli blockade had prevented moving enough cash to the Hamas-run coastal enclave in time to cover salaries of more than 77,000 government employees.

"We are facing a real problem. There is a need for 250 million Israeli shekels ($63 million) to pay the salaries. Now, there are only 47 million shekels ($12 million) in the banks in the Gaza Strip and this is not enough to pay employees," Fayyad told reporters.

"Israel's refusal to allow the transfer of sufficient cash to Palestinian banks in the Gaza Strip is part of the unfair siege. It is not a new step, but Israel has tightened the blockade in the past three weeks," he added.

Imposed to generate political pressure on Islamist Hamas, the blockade has been stepped up amid a surge in border clashes between Israeli forces and Palestinian militants.

An Israeli defence ministry official said that only humanitarian aid would be allowed into Gaza as long as militant rocket fire into Israel continued and crossings remained shut.

"As long as the rocket fire continues it will not be possible to provide even the most basic supplies beyond humanitarian aid," the official, Peter Lerner, said.

Fayyad spoke to reporters in the West Bank city of Ramallah where his government sits. Gaza is run by rival Islamist group Hamas who violently seized the strip from Palestinian President Mahmoud Abbas's Fatah faction in June 2007.

Abbas appointed Fayyad prime minister following the Gaza takeover and his dismissal of the Hamas-led government.

Fayyad said banks in Gaza paid salaries in U.S. dollars or Jordanian dinars when there was a shortage of Israeli hard currency but added that at the moment there was a severe shortage of all currencies. (Writing by Wafa Amr; Editing by Ori Lewis and Richard Balmforth)

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