"We wanted $5.6 billion, we have $7.4 billion -- not bad," French Foreign Minister Bernard Kouchner said following the one-day donors' conference of nearly 90 countries and international organizations, the Associated Press reported.
The Palestinian government sought the funds to revive its moribund economy and strengthen the Western-backed Abbas in his struggle with rival Hamas leaders, Reuters reported. Abbas has recently re-opened peace negotiations with Israel.
"Without the continuation of this aid and without the liquidity needed for the Palestinian budget, we will have a catastrophe in the Gaza Strip and in the West Bank," Abbas told the conference.
French President Nicolas Sarkozy urged the visiting states to be generous at the conference, the financial sequel to last month's Annapolis meeting that launched the first Israeli-Palestinian peace talks in seven years.
The European Union offered $640 million of grant aid for the Palestinians. The United States pledged some $555 million and Sarkozy said France would give $300 million.
"This conference is literally the government's last hope to avoid bankruptcy," U.S. Secretary of State Condoleezza Rice said.
A World Food Programme survey on Monday found median household income in Gaza fell 30 percent over the last six months. The survey said about 70 percent of non-refugee households surveyed earned less than $1.20 per person per day.
Hamas condemned the conference as "a declaration of war."
"We support all forms of aid, financial or otherwise, to the Palestinian people. But the Paris conference is coating poison with honey and is a dangerous conspiracy," Hamas spokesman Fawzi Barhum said in a statement released in Gaza, Agence France-Presse reported.
Referring to renewed Middle East peace efforts stemming from the U.S.-sponsored conference in Annapolis, Md., last month, Rice said, "This is the most promising opportunity to seek peace that we have had in nearly seven years. And we need to seize it."
Palestinian Prime Minister Salam Fayyad called the pledges part of the process for "establishing an independent Palestine."
The sum raised Monday was substantial even compared to the more than $10 billion that donor countries have given to the Palestinians in the past decade, according to the World Bank. Officials have said the Palestinians have received more international aid on a per capita basis than any other nation or group of people in the postwar period.
But the development charity Oxfam warned donor nations that they were pouring cash "into a leaking bucket," arguing that aid efforts already in place were being seriously hampered by Israeli restrictions on movement.
Two key issues dominated the conference: the need for Israel to ease restrictions on Palestinians while not compromising on its security, and the fate of Gaza, which has been virtually cut off from the world since the Islamic militant Hamas seized control by force in June.