“This is an unprecedented decision... on which we can build,” [labor minister Ahmad] Majdalani told AFP, dismissing criticism that the rate was to low.

Responding to a call by Palestinian trade unions, scores of workers demonstrated outside the parliament building, chanting: “The poor do not agree with Fayyad.”

Tuesday’s vote also set a daily private sector minimum wage of 65 shekels ($16.80, 13 euros) and an hourly floor of 8.5 shekels ($2.20, 1.7 euros). It is the result of recommendations made by a committee of government and trade union officials and employers’ representatives, after 18 months of discussions.

Shaher Saad, head of the Palestine General Federation of Trade Unions, said that the low minimum would “further encourage the exodus of Palestinian labour to Israeli settlements and abroad.”

But the head of the General Union of Palestine Workers, which is linked to the Palestine Liberation Organisation (PLO), hailed the move as “a historic day for Palestinian workers.”

“We agreed to a minimum wage, given the fact that this is the first time in Palestinian history,” Haidar Ibrahim told AFP. “It is to be reviewed in a year.