Palestinian ministers met on Tuesday to discuss ways of easing economic hardships, which have provoked growing protests across the West Bank, challenging the Western-backed Palestinian Authority.
The demonstrations turned violent in the cities of Hebron and Nablus on Monday as thousands of angry youths burned tyres, blocked streets and hurled stones at armed police, raising pressure on Prime Minister Salam Fayyad.
The protests are being eyed with growing concern by Israel, which fears the frustration against Palestinian leadership could snowball into a third, general uprising against the Israeli occupation of the West Bank.
Out of cash and bound by economic accords that peg its sales tax to steep Israeli rates, the Palestinian Authority is struggling to salvage its legitimacy in the eyes of the public.
"If the government doesn't come out with serious, concrete solutions, the protests will go on and become bigger," said Wasel Abu Yousef, a member of the Palestine Liberation Organization's executive committee.
Government employees, many of whom will receive only part of their August salaries because of the cash crisis, staged a partial strike on Tuesday and promised to picket the cabinet meeting in the de facto capital of Ramallah.
The meeting was due to end at around 1 p.m. (1000 GMT)
Public transport and taxi workers went on strike on Monday, leaving the West Bank's streets unusually quiet.
The scenes in Hebron, in which crowds pelted a giant poster of Fayyad with a rain of shoes and attacked a government building and police station, were unprecedented, locals said.
Palestinians have mostly saved their outrage for Israel, which has occupied the West Bank for 45 years, and even some of the protesters were surprised by the intensity of the violence.
"There are some parties who are trying to escalate the situation, and push it out of control. These parties are the ones attacking police stations and public facilities," the PLO's Abu Yousef told Reuters.
The Islamic group Hamas, which holds sway in the isolated Gaza Strip and is fiercely opposed to Palestinian President Mahmoud Abbas, has a strong following in Hebron.
In the wake of Monday's violence, messages were posted on Facebook and other social media urging calm.
"Protest, but don't destroy your country," said one message, adding: "Palestine is bigger than everyone."
Abbas initially welcomed the protests when they started to pop up last week, equating them with the Arab Spring and pinning the blame firmly on Israel for the economic turbulence.
But if the movement develops, it could undermine his own position, with the veteran leader having little to show for his policy of seeking a negotiated peace settlement with Israel.
When the Arab Spring first rippled across the Middle East last year, the Palestinian Territories remained quiet. Locals said there was no appetite for fresh confrontation after decades of mainly fruitless rebellion against Israel.
Tensions have risen over the summer months, with Palestinians angry at continued deep schisms within their own political class, and frustrated at the soaring cost of living.